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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's recent performance has been impacted by mixed signals in its industry dynamics. The company's Q3 2025 Interim Financial Report revealed a 10% organic growth in service orders, but noted uncertainty in project sanctioning, affecting products order intake. Analyst views have shifted, with a modest increase in the consensus analyst price target to DKK 479.89, reflecting a cautiously improved outlook. Additionally, the company's share buy-back program, initiated in June 2025, has seen continued transactions, with the aim of repurchasing up to DKK 1.4 billion worth of shares.

1.c. Company Highlights

2. FLSmidth's Q3 Earnings: A Strong Performance Amidst Challenges

FLSmidth reported a revenue of DKK 3.4 billion, a gross margin of 34.7%, and an adjusted EBITDA of DKK 530 million, representing a 15.3% EBITDA margin. The company's EPS came in at 6.9, significantly beating estimates of 4.96. The strong EPS performance was driven by a better mix, resulting in a higher gross margin. The company's SG&A costs are on a downward trend, and it reported a healthy cash flow of DKK 478 million from operating activities and DKK 358 million in free cash flow.

Publication Date: Nov -14

📋 Highlights
  • Service & PCV Growth: Service orders rose 10% organically; PCV achieved 9% organic growth, driven by third-party pump conversions.
  • EBITDA Guidance Met: Adjusted EBITDA margin at 15.3% (Q3), aligned with full-year guidance of 15–15.5%, despite revenue at the low end of DKK 14.5B target.
  • Margin & Cost Efficiency: Gross margin improved to 34.7% (Q3), SG&A costs declining, with free cash flow at DKK 358M and operating cash flow DKK 478M.
  • Product Strategy Shift: Focus on high-tech core products (e.g., KREBS pumps) and exit low-margin segments, reducing product order backlog by 250 headcount.
  • Market Outlook: Strong gold market activity (Africa, Central Asia) offsetting slower copper demand; service margins steady at ~20%, PCV at ~15%.

Segment Performance

The company's service and PCV businesses performed well, with service orders increasing organically by 10%. The PCV segment reported a 9% organic growth year-to-date. Mikko Keto, the company's CEO, highlighted that the service business is mostly spare parts and wear parts, with a small part of capital spares related to modernization, and is mostly transactional, not based on multi-year contracts. The product business, on the other hand, was quiet on orders, but the company is busy with engineering orders and work for future projects.

Guidance and Outlook

FLSmidth adjusted its guidance to the lower end of its previous interval on revenue, citing DKK 14.5 billion. The adjusted EBITDA margin remains unchanged at 15.0% to 15.5%. The company expects service to improve in Q4, and PCV to perform well. However, the underlying order intake for products was weaker than expected, and the company is not ruling out a lower range for product orders.

Valuation Metrics

Using the current stock price and the reported EPS, the P/E Ratio stands at 46.27, indicating a relatively high valuation. Other valuation metrics, such as the P/B Ratio (2.38), P/S Ratio (1.33), and EV/EBITDA (9.37), provide a more comprehensive picture. The company's ROE is 4.7%, and the ROIC is 10.18%. Analysts estimate next year's revenue growth at 2.9%, which may not be sufficient to justify the current valuation.

Operational Highlights

Mikko Keto mentioned that the company is improving its supply chain and internal operations, with a focus on making a scalable platform that can support future growth. The company has a strong presence in core product areas and is focused on growing its service business. The service EBITDA margin is around 20%, and PCV is expected to maintain its current margin.

3. NewsRoom

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FLSmidth: Transactions under share buy-back programme

Dec -03

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Change of management at NTG Nordic Transport Group A/S

Nov -27

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FLSmidth & Co. A/S major shareholder announcement

Nov -26

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FLSmidth: Transactions under share buy-back programme

Nov -26

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How Recent Events Are Changing the Narrative for FLSmidth

Nov -21

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FLSmidth: Transactions under share buy-back programme

Nov -19

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SIG names FLSmidth’s head Mikko Keto as its new CEO

Nov -18

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

Nov -18

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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

Strength

Weaknesses

Opportunities

Threats

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

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Melrose

A-Score: 4.7/10

Value: 4.8

Growth: 2.1

Quality: 6.0

Yield: 2.5

Momentum: 8.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Spirax-Sarco Engineering

A-Score: 4.4/10

Value: 2.2

Growth: 5.2

Quality: 5.4

Yield: 3.1

Momentum: 5.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Beijer Ref

A-Score: 4.4/10

Value: 2.4

Growth: 8.7

Quality: 5.5

Yield: 1.2

Momentum: 3.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
FLSmidth

A-Score: 4.3/10

Value: 2.7

Growth: 2.7

Quality: 4.7

Yield: 2.5

Momentum: 7.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Interroll

A-Score: 4.0/10

Value: 2.0

Growth: 4.7

Quality: 7.4

Yield: 2.5

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Marel

A-Score: 3.9/10

Value: 3.2

Growth: 4.0

Quality: 2.2

Yield: 0.6

Momentum: 8.5

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

410.2$

Current Price

410.2$

Potential

-0.00%

Expected Cash-Flows