FLSmidth & Co. A/S (FLS.CO) | Investment Case

1. Company Snapshot

1.a. Company Description

FLSmidth & Co. A/S provides engineering and service solutions for mining and cement industries in North America, South America, Europe, North Africa, Russia, Asia, Sub-Saharan Africa, the Middle East, SSAMESA, and Australia.The company offers various products, systems, and services, including precious metals, gravity concentrator service, audits and training, gas analysis and emissions monitoring services, liner profiling and scanning, kiln, packing and dispatching equipment, air pollution control, pneumatic conveying, gear, technical advisory, electrical and automation audits, mine planning, feeding and dosing equipment, and other services for the mining and cement industries.The company was founded in 1882 and is headquartered in Valby, Denmark.

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1.b. Last Insights on FLS

FLSmidth & Co. A/S recent performance has been driven by several positive factors. The company's share buy-back programme, initiated in June 2025, has continued to execute, with recent transactions under the programme. This programme aims to repurchase up to DKK 1.4 billion worth of shares, reducing the outstanding share count and potentially benefiting shareholders. Additionally, Société Générale S.A.'s recent notification of its holdings in FLSmidth indicates a continued interest in the company. Furthermore, the company's solid year-to-date performance, with a 20.7% rise, suggests positive momentum.

1.c. Company Highlights

Last Price	551
Change Percentage	0.92%
Open	545
Previous Close	546
Market Cap ( Millions)	30126
Volume	88482
Year High	619.5
Year Low	250
M A 50	509.89
M A 200	440.47

FCF Yield	1.55%
Dividend Yield	1.45%
ROE	0.00%
Debt / Equity	28.96%
Net Debt / EBIDTA	64.20%
Price To Book	3.17
Price Earnings Ratio	0
Price To FCF	64.51
Price To sales	1.93
EV / EBITDA	9.59

2. FLS Reports Solid FY 2025 Results Amidst Transformation

The company's financial performance for FY 2025 was solid, with revenue coming in at DKK 4 billion and a gross margin of 34.6%. The adjusted EBITDA margin was 18%, and the company reported a free cash flow of DKK 640 million. However, the EPS was -5.10287, significantly below estimates of 6.34. The company's transformation into a pure-play mining supplier following the divestment of its cement business contributed to solid organic growth in its service business line and products such as cyclones and valves.

Publication Date: Feb -20

                                    📋 Highlights
                                    Strategic Transformation::
                                                Completed cement business divestiture, transitioning to pure-play mining supplier with 16% EBITDA margin and DKK 640 million free cash flow.
Financial Strength::
                                                DKK 4 billion revenue, 34.6% gross margin, 18% adjusted EBITDA margin, and initiated DKK 1.4 billion share buyback program.
2026 Guidance::
                                                Organic revenue growth -1% to +4%, EBITDA margin 15.5–16.5%, with service line growth 2–5% and products decline -5% to -15%.
Product Margin Recovery::
                                                Q4 profitability boosted by large orders, but products need to breakeven by Q4 2026; SG&A costs reduced 19% in Q4.
Cash Flow & Capex::
                                                DKK 700–1 billion operating cash flow target for 2026, DKK 100 million ERP implementation cost, and 2–3% revenue Capex guidance.

                                

Segmental Performance

The service business line saw significant growth, driven by a different mix of activities and growth rates. The products business line, however, is expected to decline by 5-15% in 2026, although the company is working to improve profitability. As Toni Laaksonen mentioned, "We're now focused on the product side and derisking the products business." The pumps business is expected to post an organic growth rate of 4-7%.

Guidance and Outlook

For 2026, the company is guiding for minus 1% to plus 4% organic revenue growth and an adjusted EBITDA margin of 15.5% to 16.5%. The company expects to return DKK 1.4 billion to shareholders through dividends and share buybacks. With a current P/S Ratio of 1.89 and EV/EBITDA of 9.42, the market is pricing in moderate growth expectations. The company's ROE is currently at 0.0%, and ROIC is at 5.31%, indicating room for improvement in capital allocation.

Valuation and Capital Allocation

The company's dividend yield is 1.48%, and the free cash flow yield is 1.58%. With a P/B Ratio of 3.11, the market is pricing in a premium for the company's book value. The company's net debt to EBITDA is 0.64, indicating a relatively healthy balance sheet. As Roland Andersen mentioned, the company is expecting a one-off item of around DKK 100 million related to its ERP implementation and principal company model.

Strategic Initiatives

The company is focusing on organic expansion, selective M&A, and improving its customer offering. It is also working on supply chain improvements and accountability within the organization. The company is hosting a Capital Markets Day in September to release its full strategy for the coming years, which is expected to provide more clarity on its growth prospects.

3. NewsRoom

FLSmidth & Co. A/S: Trading in FLSmidth shares by board members, executives and associated persons

12:53

Source:

Correction: Proposed changes to the FLSmidth & Co. A/S Board of Directors at the coming Annual General Meeting

07:40

Source:

FLSmidth:

07:21

Source:

FLSmidth & Co AS (FLIDF) Full Year 2025 Earnings Call Highlights: Strong Service Growth ...

Feb -18

Source:

FLSmidth 2025 Annual Report: Solid performance provides strong foundation for the next phase, focused on accelerating growth

Feb -18

Source:

FLSmidth: Transactions under share buy-back programme

Feb -18

Source:

FLSmidth announces intention to initiate a new share buy-back programme of up to DKK 1.0 billion

Feb -17

Source:

FLSmidth: Transactions under share buy-back programme

Feb -11

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Mining

Expected Growth: 4.5%

Growing demand for minerals and metals, increasing adoption of automation and digitalization, and rising focus on sustainability are driving the growth of the mining solutions market.

Cement

Expected Growth: 4.5%

Growing demand for sustainable infrastructure, increasing urbanization, and government investments in construction projects drive the cement market growth, with FLSmidth & Co. A/S's energy-efficient and environmentally friendly cement solutions well-positioned to capitalize on this trend.

Non-Core Activities

Expected Growth: 4.5%

FLSmidth's divestment of non-core activities enables focus on high-growth cement and mining industries, driven by increasing infrastructure development and urbanization, leading to a forecasted CAGR of 4.5%.

7. Detailed Products

Cement Production

FLSmidth provides cement production solutions, including equipment, automation, and services for cement plants, enabling efficient and sustainable production.

Mining Solutions

FLSmidth offers mining solutions, including crushing, grinding, and flotation systems, to help mining companies extract and process minerals efficiently.

Mineral Processing

FLSmidth provides mineral processing solutions, including comminution, separation, and dewatering systems, to help mining companies extract valuable minerals.

Automation and Digitalization

FLSmidth offers automation and digitalization solutions, including control systems, data analytics, and IoT solutions, to help mining and cement companies optimize their operations.

Service and Maintenance

FLSmidth provides service and maintenance solutions, including spare parts, repair services, and training, to help mining and cement companies maintain their equipment and operations.

8. FLSmidth & Co. A/S's Porter Forces

Forces Ranking

Threat Of Substitutes

FLSmidth & Co. A/S operates in the cement and mining industries, where substitutes are limited. However, the company's products and services can be substituted with alternative solutions, such as in-house production or alternative suppliers.

Bargaining Power Of Customers

FLSmidth & Co. A/S's customers, typically large cement and mining companies, have significant bargaining power due to their size and negotiating ability.

Bargaining Power Of Suppliers

FLSmidth & Co. A/S has a diverse supplier base, and the company's size and global presence give it significant bargaining power over its suppliers.

Threat Of New Entrants

The cement and mining industries have high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to compete with FLSmidth & Co. A/S.

Intensity Of Rivalry

The cement and mining industries are highly competitive, with several established players competing for market share. However, FLSmidth & Co. A/S's strong brand and global presence help to mitigate the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	15.03%
Debt Cost	11.23%
Equity Weight	84.97%
Equity Cost	11.23%
WACC	11.23%
Leverage	17.68%

11. Quality Control: FLSmidth & Co. A/S passed 1 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Spirax-Sarco Engineering

A-Score: 4.3/10

Value: 2.8

Growth: 5.2

Quality: 5.5

Yield: 3.8

Momentum: 3.0

Volatility: 5.7

1-Year Total Return ->

Interroll

A-Score: 4.3/10

Value: 2.4

Growth: 4.7

Quality: 7.4

Yield: 2.5

Momentum: 5.0

Volatility: 4.0

1-Year Total Return ->

Beijer Ref

A-Score: 4.1/10

Value: 2.1

Growth: 8.6

Quality: 4.7

Yield: 1.2

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

Melrose

A-Score: 4.1/10

Value: 5.0

Growth: 2.1

Quality: 6.0

Yield: 2.5

Momentum: 5.0

Volatility: 4.0

1-Year Total Return ->

FLSmidth

A-Score: 4.0/10

Value: 3.6

Growth: 2.7

Quality: 5.4

Yield: 2.5

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

Marel

A-Score: 3.4/10

Value: 3.0

Growth: 4.0

Quality: 2.4

Yield: 0.6

Momentum: 5.5

Volatility: 5.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

25.52%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

11.23%

FLSmidth & Co. A/S - DK0010234467

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on FLS

1.c. Company Highlights

Expensive

Average Yield

Average Quality

Earnings Beats

Revenues Miss

Average Growth

Fairly Valued

Revenues Beats

Earnings Miss

Lower Growth

Strong Momentum

Stable Momentum

Medium Volatility

Weak Momentum

2. FLS Reports Solid FY 2025 Results Amidst Transformation

Segmental Performance

Guidance and Outlook

Valuation and Capital Allocation

Strategic Initiatives

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Mining

Expected Growth: 4.5%

Cement

Expected Growth: 4.5%

Non-Core Activities

Expected Growth: 4.5%

7. Detailed Products

Cement Production

Mining Solutions

Mineral Processing

Automation and Digitalization

Service and Maintenance

8. FLSmidth & Co. A/S's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: FLSmidth & Co. A/S passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

551.0$

Current Price

551$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA