FLSmidth raises 2026 guidance as copper and gold demand drives stronger mining orders

FLSmidth & Co. A/S delivered a sharp second-quarter acceleration as stronger demand for mining services, pumps and processing equipment pushed revenue up 17% year over year to DKK3.94 billion. Organic revenue growth reached 16%, adjusted EBITA increased 33% to approximately DKK683 million and adjusted EBITA margin expanded to 17.3% from 15.2%, while quarterly profit reached DKK441 million. Order intake increased 14% to approximately DKK4.03 billion, supported by growth across all three operating businesses and continued strength in mining markets tied particularly to copper and gold. FLSmidth responded by raising the lower ends of its 2026 revenue-growth and margin guidance ranges, helping send its Copenhagen-listed shares up 6.3% on August 19.

The results provide further evidence that FLSmidth’s transition into a mining-focused technology and services company is producing stronger economics. Service and Pumps, Cyclones & Valves continued generating high-margin recurring demand, while the Products business returned to positive adjusted EBITA profitability after several years of portfolio pruning and restructuring. That combination allowed consolidated margins to expand even as the company increased revenue materially.

The strongest caution came from cash flow rather than earnings. Cash flow from operating activities was negative DKK84 million compared with positive DKK527 million a year earlier, as net working capital increased significantly amid project timing, inventory investment and work-in-progress balances. Investors nevertheless focused on the improved earnings profile and guidance, with FLSmidth shares closing around DKK529.50, up 6.28%, on volume more than four times the recent average.

FLSmidth’s 16% organic revenue growth marks a sharp acceleration from the first quarter

Second-quarter revenue reached DKK3.94 billion compared with DKK3.38 billion a year earlier, representing 17% reported growth and 16% organic growth. The performance marked a substantial reversal from Q1, when organic revenue had declined 7% and total revenue fell 12% because of project timing and the composition of the backlog.

The improvement was broad rather than concentrated in one operating unit. Service revenue increased organically by 11%, Products revenue surged 34% organically and PC&V revenue grew 14%, giving FLSmidth growth across all three business lines during the quarter.

That breadth matters because FLSmidth has spent several years reshaping the business around mining after reducing exposure to lower-return activities. Management has deliberately emphasized businesses where technology, installed equipment and aftermarket relationships can create more durable revenue rather than depending primarily on large one-off capital projects.

Order activity also remained constructive. Q2 order intake reached approximately DKK4.03 billion, up 14% on a reported basis and 13% organically, while the order backlog stood at approximately DKK11.52 billion at the end of the first half, about 8% higher year over year.

FLSmidth highlighted continued strength in its project pipeline, particularly across copper and gold. Management also secured an approximately DKK300 million order for technologies supporting an iron-ore beneficiation project in South Asia, demonstrating that larger equipment projects are beginning to supplement the stronger recurring Service and PC&V businesses.

Copper is especially important to the longer-term investment case because electrification, grid development and data-center infrastructure continue to increase attention on future mine supply. FLSmidth does not need to own the underlying commodities to benefit from that cycle, because new mines and productivity investments can generate demand for grinding, flotation, pumps, cyclones, valves and aftermarket services.

Service and PC&V provide the high-margin foundation behind FLSmidth’s earnings improvement

The Service business remained FLSmidth’s largest operating segment, with Q2 revenue reaching approximately DKK2.32 billion. Organic order intake increased 14% to around DKK2.41 billion, leaving the business with a book-to-bill ratio above one and indicating that new work continued to replace revenue being recognized.

Adjusted EBITA margin in Service improved to 20.7% from 19.6% a year earlier. That level is important because aftermarket parts, maintenance, upgrades and productivity services generally provide more recurring and predictable economics than major greenfield equipment projects.

The PC&V business performed even more strongly on profitability. Organic order intake increased 18% to approximately DKK915 million, revenue grew 14% organically to DKK818 million and adjusted EBITA margin remained at a robust 23.3%.

PC&V’s book-to-bill ratio reached approximately 112%, meaning orders exceeded recognized revenue during the quarter. FLSmidth said replacement demand and market-share gains in North and South America continued supporting the business, while equipment installations can also generate future aftermarket demand.

The combination of Service and PC&V gives FLSmidth an earnings base less dependent on the timing of massive new mines. Existing operations still need maintenance, replacement equipment and productivity improvements even when miners delay large capital-investment decisions, helping stabilize revenue and margins through different parts of the commodity cycle.

That resilience is reflected in FLSmidth’s revised 2026 expectations. Management now projects organic Service revenue growth of 3%–5% and PC&V growth of 5%–8%, both modestly stronger than the ranges communicated earlier in the year.

Products business returns to profitability as FLSmidth’s restructuring begins to show results

The Products business delivered perhaps the most important improvement in Q2. Organic revenue increased 34% to approximately DKK802 million, while adjusted EBITA margin reached positive 1.9% compared with negative 8.2% in the prior-year quarter.

The turnaround follows an extended effort to prune lower-quality orders, reduce risk and resize the cost base. Those actions previously reduced the backlog and are still expected to cause full-year Products revenue to decline between 5% and 15%, but the Q2 result suggests the remaining portfolio is beginning to generate substantially better economics.

Products order intake increased approximately 5% organically to DKK702 million, which was below the DKK802 million of revenue recognized during the quarter. The resulting book-to-bill ratio below one shows that the segment has not yet returned to the same commercial momentum as Service or PC&V.

Management attributed some of that difference to the timing of final investment decisions on larger mining projects. FLSmidth nevertheless described the broader project pipeline as encouraging, especially in copper and gold, suggesting that delayed projects could become a source of future order growth rather than representing cancelled demand.

The Products turnaround matters disproportionately because losses in that business previously diluted the strong profitability generated elsewhere. Even modest positive margins can materially improve consolidated earnings when combined with Service margins above 20% and PC&V margins above 23%.

That leverage was visible in Q2. Consolidated adjusted EBITA rose to roughly DKK683 million, and adjusted EBITA margin increased 2.1 percentage points year over year to 17.3%. Gross margin also improved to 36.5% from 35.5%.

FLSmidth raises 2026 guidance as stronger margins compensate for uneven mining investment

FLSmidth raised its 2026 organic revenue-growth guidance to 0%–4% from a previous range of negative 1% to positive 4%. The adjustment is modest at the headline level but removes the possibility of an organic revenue contraction at the lower end of management’s expectations.

The profitability revision is more meaningful. Adjusted EBITA margin is now expected at 16.0%–16.5%, compared with the previous 15.5%–16.5% range, effectively raising the minimum profitability management expects to generate during the year.

The company expects stable earnings margins in Service and PC&V alongside continued improvements in Products. Corporate simplification, operational efficiency and commercial execution are also expected to support the margin, while approximately DKK100 million of costs associated with the company’s ERP upgrade are excluded from the adjusted EBITA measure.

The revised guidance follows a strong first half in which organic revenue increased 4% and adjusted EBITA margin reached 16.4%. Q2 therefore provided the acceleration required to compensate for the weaker revenue performance during the opening quarter.

FLSmidth’s earnings comparison also requires some care because first-half reported profit benefited from the sale of its former corporate headquarters in Valby. The transaction generated approximately DKK675 million of other operating income during Q1, which management excludes when evaluating underlying adjusted EBITA profitability.

Q2 provides a cleaner picture of operating momentum because the quarter’s DKK441 million profit coincided with strong organic growth and higher margins rather than a major property-sale gain. The comparison with the prior-year period is also affected by discontinued operations, making adjusted operating measures particularly useful when evaluating the transformation.

Negative operating cash flow remains the main weakness behind FLSmidth’s strong Q2 results

The most significant negative indicator was operating cash flow. FLSmidth reported a DKK84 million Q2 operating cash outflow compared with DKK527 million of positive operating cash flow in the same quarter of 2025.

Net working capital increased to approximately DKK3.60 billion, equivalent to about 24.4% of trailing 12-month revenue. The balance rose approximately DKK817 million from Q1, driven by work-in-progress billing timing, selective inventory increases and the changing composition of the project backlog.

That movement does not necessarily indicate deteriorating demand or customer quality, but it does mean reported earnings are temporarily converting into cash less efficiently. Large engineering projects can create significant timing differences between inventory purchases, project milestones, customer payments and final revenue recognition.

Management does not expect an immediate normalization of working capital and has indicated that more meaningful improvement may extend into 2027. That makes cash conversion one of the most important metrics to watch alongside margins during the next several quarters.

FLSmidth still has considerable capacity to return capital. The company launched a share repurchase program of up to DKK1 billion in May, covering as many as 2.3 million shares, equivalent to roughly 4% of its share capital when the program was announced.

The buyback reinforces management’s confidence in the balance sheet and underlying cash-generation potential, but sustained working-capital expansion could eventually reduce the flexibility available for shareholder returns or acquisitions. Investors will therefore want stronger operating cash conversion to accompany the improving earnings profile.

FLSmidth’s 6% share rally shows investors are rewarding the mining-focused transformation

FLSmidth shares closed at approximately DKK529.50 on August 19, gaining 6.28% for the session after trading as high as DKK548. Volume reached roughly 440,000 shares compared with average volume below 100,000, showing unusually strong investor participation following the results.

The rally valued FLSmidth at approximately DKK28.7 billion, although the shares remain below their 52-week high of DKK619.50. The performance suggests investors see further earnings upside if the company can maintain mid-to-high-teens margins while converting its stronger Service, PC&V and project pipeline into revenue.

The strategic shift is increasingly visible in the financial results. FLSmidth has moved from a more complex portfolio toward a focused mining technology model where aftermarket services, specialized flow-control products and selectively chosen major equipment projects contribute different risk and margin profiles.

Q2 offered perhaps the clearest evidence yet that the combination can work. Revenue growth accelerated to 17%, order intake increased 14%, adjusted EBITA margin reached 17.3% and the previously loss-making Products operation returned to profitability.

The main unresolved issue is whether those accounting profits can translate into stronger cash generation as working capital normalizes. If FLSmidth can deliver both, the current copper and gold project pipeline combined with recurring Service and PC&V demand could provide a much stronger earnings base than the company carried before its mining-focused restructuring.

Key takeaways from FLSmidth’s Q2 growth, higher guidance and 6% share rally

• FLSmidth’s Q2 revenue rose 17% to DKK3.94 billion, with organic revenue growth reaching 16% across all three business lines.
• Q2 order intake increased 14% to approximately DKK4.03 billion, while organic order growth reached 13%.
• Adjusted EBITA increased 33% to DKK683 million, lifting the margin to 17.3% from 15.2%.
• Quarterly profit reached DKK441 million, reflecting stronger underlying mining operations and improved execution.
• Service delivered a 20.7% adjusted EBITA margin, while PC&V maintained a 23.3% margin.
• Products returned to profitability with a 1.9% adjusted EBITA margin, compared with negative 8.2% a year earlier.
• FLSmidth raised 2026 organic revenue-growth guidance to 0%–4% and adjusted EBITA-margin guidance to 16.0%–16.5%.
• The order backlog reached approximately DKK11.5 billion, supported by continued opportunities in copper, gold and other mining projects.
• Q2 operating cash flow turned negative at DKK84 million, with higher working capital remaining the main financial weakness.
• FLSmidth shares jumped 6.28% to DKK529.50 on August 19, with trading volume more than four times the recent average.