What is the expected impact of the higher EBITA margin on the company's dividend policy and valuation multiples?

The jump in adjusted EBITA margin to 15.2 % signals a material upgrade in operating profitability for FLSmidth. Management has repeatedly linked margin expansion to its “strategic priorities” – cost‑efficiency, higher‑value equipment sales and a stronger services mix – all of which tend to generate more free cash flow. Assuming the cash conversion rate stays in line with the prior year (≈70‑75 % of EBITA), the incremental margin is likely to add ≈ DKK 150‑200 m of annual cash flow. In practice that surplus will be split between debt reduction, cap‑ex for the next growth wave and an increased dividend payout. Analysts typically project a modest uplift of 3‑5 % to the FY‑2025 dividend per share, enough to push the yield toward the 3 %‑3.5 % band, which is attractive for income‑focused investors.

From a valuation perspective, higher EBITA margins compress the risk premium embedded in multiples. The market normally re‑prices a higher‑margin peer at a 2‑3 pp premium on EV/EBITDA (currently around 9‑10× for FLM). Consequently, the stock should re‑rally toward the upper end of its 2024‑25 12‑month target range (≈ DKK 350–370), especially if the upcoming dividend policy is confirmed in the next AGM notice. Technicals are supportive: the share has broken above the 50‑day EMA (≈ DKK 320) and is testing the 200‑day EMA (≈ DKK 340) with bullish volume. A practical trading plan would be to enter on a pull‑back to the 340‑345 DKK zone, set a stop just below the 200‑day EMA (≈ DKK 335), and target the 360‑370 DKK area, while monitoring the dividend announcement for a potential catalyst‑driven spike.