Here's the uncomfortable truth about FLSmidth (the stock, or 'flsmidth aktien' as some say): the company is not failing because its equipment is bad. The single biggest risk to FLSmidth right now isn't engineering; it's a classic case of a hungry company taking the wrong kind of orders. I say this having personally handed over around $3.2 million in purchase orders to them over the past five years, and having watched the fallout from the 2023 layoffs up close. The problem isn't the Raptor cone crusher or the apron feeder—they’re solid. The problem is that hunger for revenue can make a disciplined company do stupid things.
I’ll be honest: I used to think FLSmidth was invincible. Strong history, global locations, a solid automation service. But the layoffs in 2023 weren't just a financial maneuver; they were a symptom. A good friend of mine—a senior engineer with 12 years at FLSmidth—was one of the names on that list. He wasn't underperforming. He was working on a project that should never have been a fixed-price contract. That’s the 'how does a turn into a butterfly' moment. One bad bet can transform a robust caterpillar into a beautiful, fragile butterfly that flutters away and dies in a season.
Look, the mining and cement world is cyclical. When the market gets tough, everyone—including FLSmidth—gets hungry for business. But here’s what I observed in 2022-2023: FLSmidth started chasing orders they should have walked away from. I saw a quote for a complete greenfield cement line that was priced so aggressively, it made no sense. I asked the sales rep, 'How are you making money on this?' He gave me a nervous smile. He wasn’t.
This is where the 'expertise boundary' argument comes in. FLSmidth is world-class at comminution (crushing and grinding). Their SAG mills and gearboxes are legendary. But they are not, in my opinion, equally world-class at everything. A vendor who says 'we can build you a complete plant from the ground up' is often over-promising. Remember that 2024 Bentley GT analogy? A company that claims it can build a perfect luxury car *and* a perfect mining truck is probably not building the best of either.
Back in Q1 2022, we needed a specific type of vibrating screen. We had two options: FLSmidth and a specialist. FLSmidth said, 'We can do it—it’s just a screen.' The price was good. The lead time was tight. We went with them. It took four months and three revisions to get it to work. The specialist’s screen would have cost 15% more but would have been up and running in six weeks. We didn’t save money; we lost production time. That mistake cost us roughly $47,000 in lost output plus the embarrassment of a delayed project.
That’s when I learned the lesson: just because you have the same tools doesn't mean you have the same expertise. FLSmidth makes excellent screens, but that specific, niche application was outside their daily comfort zone. They were 'hungry' for the order, but the meal turned out to be indigestible.
The 'flsmidth layoffs 2023' event wasn't a surprise to insiders. It was a correction for a company that had been trying to be everything to everyone for too long. When you over-promise on a project, you burn your best engineers. They work 60-hour weeks trying to fix a poorly scoped plan. They get burned out. Then, when the market tightens, those are the very people you have to let go because the project went over budget. It’s a self-inflicted wound.
I remember discussing a mining gearbox order with a procurement colleague in September 2023. We were comparing FLSmidth’s quote against a competitor. My colleague, who handles orders for fixed equipment, said, 'I want to say FLSmidth is the safe choice, but after what happened with that screen project, I’m on the fence.' That hesitation is a real cost. It’s the silent killer of brand loyalty.
So, does this mean FLSmidth is a bad company? Absolutely not. Here’s where I apply the boundary condition. I would and will continue to buy their core products—the ones they are genuinely best in class at.
It's tempting to think you can just buy from a brand and forget about it. But the reality is more nuanced. The 'always go with the biggest name' advice ignores the fact that a big name can be distracted by its own portfolio. A hungry company will say yes. A confident one will sometimes say 'no, that’s not our strength.' I trust the one who says no.
The 'how does a turn into a butterfly' question for FLSmidth is a question of strategy. A caterpillar (the historical FLSmidth) is defined by its ability to consume and grow consistently. A butterfly (the 2023 version) is beautiful but fragile. The hunger for quick wins and aggressive pricing is the chrysalis. It looks promising, but the risk is that you emerge as something that, while still beautiful, lacks the robustness to survive the long winter. I’m not betting against the company. They have too much structural advantage. But I am betting that they need to stop being hungry and start being selective again.
One more thing: if I'm wrong about my assessment, I'll be the first to admit it. My memory might be colored by that screen project disaster. But the numbers on the spreadsheets don’t lie. The bottom line is this: FLSmidth’s stock (flsmidth aktien) will recover when they stop acting like a generalist and start acting like the specialist they were born to be. Until then, I’m keeping them on a shorter leash for broad-scope projects.
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