FLSmidth signs agreement to divest its Cement business to become a pure-play supplier of technology and services to the mining industry

Company Announcement - FLSmidth has entered into an agreement to divest its Cement business to an affiliate of Pacific Avenue Capital Partners for an initial consideration of EUR 75 million (approximately DKK 550 million), plus a conditional deferred cash consideration of up to EUR 75 million [1] Strategic Focus - In early 2023, FLSmidth announced new pure-play strategies for its Mining and Cement businesses, simplifying and rightsizing both to strengthen market positions [2] - The divestment aims to maximize the potential of the Cement business and enhance the Mining business's market-leading position [3] Leadership Comments - The Chair of the Board expressed pride in the Cement business's achievements and believes the divestment will unlock potential for both businesses [4] - The CEO stated that the divestment allows FLSmidth to focus on its core Mining business, positioning it as a leader in the industry [4] Transaction Details - The transaction includes all related employees, assets, intellectual property, and technology, while certain legacy contracts and the Air Pollution Control asset will be retained by FLSmidth [5] - The transaction is expected to close in the second half of 2025, subject to regulatory approval [6] Financial Implications - The net cash proceeds from the divestment will be subject to adjustments, with a limited net cash gain expected [8] - The Cement business will be classified as held-for-sale and discontinued operations in the Q2 2025 Interim Financial Report, resulting in an impairment charge of approximately DKK 700 million [9] Financial Guidance - FLSmidth's financial guidance for 2025 will exclude discontinued operations, with expected revenue for the Mining business of approximately DKK 15.0 billion and an Adjusted EBITA margin of 14.0% to 14.5% [10] - The long-term financial target for FLSmidth Cement has been withdrawn, while the target for the Mining business remains unchanged [11] Ongoing Strategy - Until the transaction closes, FLSmidth Cement will continue to execute its GREEN'26 strategy and provide support and services during the transition [12]