CPSE:FLS

Stock Analysis Report

Executive Summary

FLSmidth & Co. A/S supplies engineering, equipment, and services to the cement and mining industries worldwide.

Rewards

Trading at 41.5% below its fair value

Earnings are forecast to grow 15.11% per year

Earnings grew by 59.9% over the past year

Risk Analysis

Unstable dividend track record



Snowflake Analysis

Very undervalued with flawless balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has FLSmidth's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FLS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.6%

FLS

2.6%

DK Machinery

1.5%

DK Market


1 Year Return

-19.6%

FLS

-25.8%

DK Machinery

23.5%

DK Market

Return vs Industry: FLS exceeded the Danish Machinery industry which returned -25.8% over the past year.

Return vs Market: FLS underperformed the Danish Market which returned 23.5% over the past year.


Shareholder returns

FLSIndustryMarket
7 Day1.6%2.6%1.5%
30 Day-2.7%1.3%4.5%
90 Day-13.7%-11.0%6.4%
1 Year-17.1%-19.6%-24.2%-25.8%27.1%23.5%
3 Year-6.7%-12.8%-7.7%-13.7%58.1%44.8%
5 Year8.3%-3.2%8.1%-3.6%85.7%60.5%

Price Volatility Vs. Market

How volatile is FLSmidth's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is FLSmidth undervalued compared to its fair value and its price relative to the market?

41.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FLS (DKK253.2) is trading below our estimate of fair value (DKK432.45)

Significantly Below Fair Value: FLS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FLS is good value based on its PE Ratio (14.3x) compared to the Machinery industry average (16.7x).

PE vs Market: FLS is good value based on its PE Ratio (14.3x) compared to the Danish market (15.4x).


Price to Earnings Growth Ratio

PEG Ratio: FLS is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: FLS is good value based on its PB Ratio (1.5x) compared to the DK Machinery industry average (1.5x).


Next Steps

Future Growth

How is FLSmidth forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

15.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FLS's forecast earnings growth (15.1% per year) is above the savings rate (-0.3%).

Earnings vs Market: FLS's earnings (15.1% per year) are forecast to grow faster than the Danish market (12.2% per year).

High Growth Earnings: FLS's earnings are forecast to grow, but not significantly.

Revenue vs Market: FLS's revenue (2.4% per year) is forecast to grow slower than the Danish market (6.7% per year).

High Growth Revenue: FLS's revenue (2.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FLS's Return on Equity is forecast to be low in 3 years time (12.1%).


Next Steps

Past Performance

How has FLSmidth performed over the past 5 years?

0.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FLS has high quality earnings.

Growing Profit Margin: FLS's current net profit margins (4.4%) are higher than last year (3%).


Past Earnings Growth Analysis

Earnings Trend: FLS's earnings have grown by 0.1% per year over the past 5 years.

Accelerating Growth: FLS's earnings growth over the past year (59.9%) exceeds its 5-year average (0.1% per year).

Earnings vs Industry: FLS earnings growth over the past year (59.9%) exceeded the Machinery industry 4.3%.


Return on Equity

High ROE: FLS's Return on Equity (10%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is FLSmidth's financial position?


Financial Position Analysis

Short Term Liabilities: FLS's short term assets (DKK12.5B) exceed its short term liabilities (DKK9.7B).

Long Term Liabilities: FLS's short term assets (DKK12.5B) exceed its long term liabilities (DKK4.8B).


Debt to Equity History and Analysis

Debt Level: FLS's debt to equity ratio (36%) is considered satisfactory.

Reducing Debt: FLS's debt to equity ratio has reduced from 77.1% to 36% over the past 5 years.

Debt Coverage: FLS's debt is well covered by operating cash flow (22.9%).

Interest Coverage: FLS's interest payments on its debt are well covered by EBIT (30x coverage).


Balance Sheet

Inventory Level: FLS has a high level of physical assets or inventory.

Debt Coverage by Assets: FLS's debt is covered by short term assets (assets are 4x debt).


Next Steps

Dividend

What is FLSmidth's current dividend yield, its reliability and sustainability?

3.55%

Current Dividend Yield


Dividend Yield vs Market

company3.6%marketbottom25%1.5%markettop25%5.0%industryaverage2.8%forecastin3Years4.2%

Current dividend yield vs market & industry

Notable Dividend: FLS's dividend (3.55%) is higher than the bottom 25% of dividend payers in the Danish market (1.52%).

High Dividend: FLS's dividend (3.55%) is low compared to the top 25% of dividend payers in the Danish market (5.01%).


Stability and Growth of Payments

Stable Dividend: FLS's dividend payments have been volatile in the past 10 years.

Growing Dividend: FLS's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (50.7%), FLS's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FLS's dividends in 3 years are forecast to be well covered by earnings (38.1% payout ratio).


Next Steps

Management

What is the CEO of FLSmidth's salary, the management and board of directors tenure and is there insider trading?

1.9yrs

Average management tenure


CEO

Thomas Schulz (54yo)

6.6yrs

Tenure

ø13,511,000

Compensation

Mr. Thomas Schulz has been Group Chief Executive Officer at FLSmidth & Co. A/S since May 1, 2013. Mr. Schulz has extensive experience from the global mining and construction industry. He served as the Pres ...


CEO Compensation Analysis

Compensation vs Market: Thomas's total compensation ($USD0.00) is below average for companies of similar size in the Danish market ($USD756.92K).

Compensation vs Earnings: Thomas's compensation has increased by more than 20% in the past year.


Management Age and Tenure

1.9yrs

Average Tenure

50yo

Average Age

Experienced Management: FLS's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Age and Tenure

2.9yrs

Average Tenure

56yo

Average Age

Experienced Board: FLS's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Lars Vestergaard (45yo)

    Group Executive VP & CFO

    • Tenure: 5.7yrs
    • Compensation: ø7.16m
  • Mikael Lindholm (45yo)

    Chief Digital Officer

    • Tenure: 1.6yrs
  • Thomas Schulz (54yo)

    Group Chief Executive Officer

    • Tenure: 6.6yrs
    • Compensation: ø13.51m
  • Anders Wisdom

    General Manager of Operations & Maintenance

    • Tenure: 0yrs
  • Sofie Lindberg

    Senior Vice President of Group Communications

    • Tenure: 0yrs
  • Manfred Schaffer (61yo)

    Mining President

    • Tenure: 1.9yrs
  • Nicolai Mauritzen

    Head of Investor Relations

    • Tenure: 1.9yrs
  • Annette Terndrup

    Head of Group Legal & Strategy

    • Tenure: 6.9yrs
  • Cori Petersen (50yo)

    Head of Group HR and HSE

    • Tenure: 1.7yrs
  • Deon de Kock

    President of Region Sub-Saharan Africa & Middle East

    • Tenure: 0yrs

Board Members

  • Tom Knutzen (57yo)

    Vice Chairman

    • Tenure: 2.6yrs
    • Compensation: ø844.00k
  • Vagn Sørensen (60yo)

    Chairman

    • Tenure: 8.7yrs
    • Compensation: ø1.35m
  • Thras Moraitis (58yo)

    Independent Director

    • Tenure: 0.8yrs
  • Mette Dobel (52yo)

    Employee-elected Member

    • Tenure: 10.9yrs
    • Compensation: ø450.00k
  • Gill Winckler (56yo)

    Independent Director

    • Tenure: 0.8yrs
  • Rob Smith (54yo)

    Independent Director

    • Tenure: 3.7yrs
    • Compensation: ø650.00k
  • Søren Larsen (41yo)

    Employee-Elected Member

    • Tenure: 6.9yrs
    • Compensation: ø544.00k
  • Anne Eberhard (56yo)

    Independent Director

    • Tenure: 2.8yrs
    • Compensation: ø431.00k
  • Claus Østergaard (53yo)

    Employee-Elected Member

    • Tenure: 2.9yrs
    • Compensation: ø413.00k

Company Information

FLSmidth & Co. A/S's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: FLSmidth & Co. A/S
  • Ticker: FLS
  • Exchange: CPSE
  • Founded: 1882
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: ø12.541b
  • Shares outstanding: 50.04m
  • Website: https://www.flsmidth.com

Number of Employees


Location

  • FLSmidth & Co. A/S
  • Vigerslev Allé 77
  • Valby
  • Copenhagen
  • Capital Region of Denmark
  • 2500
  • Denmark

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FLSCPSE (OMX Nordic Exchange Copenhagen)YesCommon SharesDKDKKJan 1992
F6O1DB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1992
0OJALSE (London Stock Exchange)YesCommon SharesGBDKKJan 1992
FLID.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJan 1992
FLSCBATS-CHIXE (BATS 'Chi-X Europe')YesCommon SharesGBDKKJan 1992
FLID.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDMay 2008

Biography

FLSmidth & Co. A/S supplies engineering, equipment, and services to the cement and mining industries worldwide. The company operates through Mining and Cement segments. The company also engages in the mini ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/07 20:45
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.