FLSmidth Q2 trading dip amid COVID-19 pandemic

FLSmidth, the Denmark-headquartered global cement and mining products and services group, saw its Q2 2020 organic order intake fall 29% and organic revenue drop 26% year-on-year, according to preliminary figures released ahead of the business’s full second-quarter interim report.
Quarry Products / July 27, 2020
By Guy Woodford
FLSmidth's second-quarter trading was disrupted by COVID-19. Pictured is a FLSmidth customer cement kiln pic: FLSmidth

Order intake was DKK 3,348mn (€449.77mn) compared to DKK 4,954mn (€665.52mn) in Q2 2019 (-32%). Revenue amounted to DKK 3,846 (€516.67mn) compared to DKK 5,472 (€735.11mn) in Q2 2019 (-30%). The negative development in both order intake and revenue was larger in Cement than in Mining. Across both industries, and for both order intake and revenue, FLSmidth’s service business was relatively more resilient than the capital business.

In H1 2020, FLSmidth’s order intake was DKK 9,874mn (€1.326bn) compared to DKK 10,594mn (€1.423bn) in H1 2019 (-7%). Revenue amounted to DKK 8,371mn (€1.124bn) compared to DKK 9,888mn (€1.328bn) in H1 2019 (-15%).

An FLSmidth spokesperson said: “Based on preliminary figures from our business segments, EBITA is expected at DKK 131mn in Q2 2020 compared to DKK 487mn in Q2 2019 (-73%), and the EBITA margin is expected to be 3.4%. In H1 2020, EBITA is expected to reach DKK 359mn compared to DKK 799mn in H1 2019 (-55%), and the EBITA margin is expected to be 4.3%. The figures include costs associated with our ongoing business improvement activities.

“Our financial position remains strong. Our net debt declined to DKK 2.3bn (€308.98mn) from DKK 2.7bn (€362.71mn) by the end of March 2020. The net debt to EBITDA was 1.5 compared to 1.4 the previous quarter.”

The group spokesperson said that across all regions, the mining industry and especially the cement industry had been negatively affected by the pandemic. They added: “Whilst the general situation around COVID-19 is improving in parts of the world, it continues to escalate in other parts. As a global supplier with customers around the world, FLSmidth is subject to these varying market conditions. Even in the regions with an easing of lockdowns and mobility restrictions, it is yet unclear how our customers’ spending patterns will advance. Thus, visibility remains low, and our guidance remains suspended.”



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