FLSmidth (FLS) Status Update summary

Strategic transformation and business focus

• Achieved milestone of becoming a 100% mining-focused company after divesting the cement business to Pacific Avenue Capital Partners, including all related employees, assets, and technology, completing a strategy initiated in 2023.

• Sale process for the cement business took about 1.5 years, with extensive market testing and multiple bids received.

• Recent sale of the Valby head office generated a net cash gain of DKK 730 million and contributed to a debt-free status.

• Share buyback program of up to DKK 1.4 billion (approx. 4.6 million shares) announced, enabled by strong financial health.

• Continued commitment to invest in organic growth, pursue bolt-on and larger acquisitions, and maintain a strong focus on sustainability, targeting zero emissions in mining by 2030.

Transaction and financial details

• Cement business sold for an initial EUR 75 million (approx. DKK 550 million), with potential deferred consideration of up to EUR 75 million based on undisclosed objectives.

• Net cash proceeds from the divestment are expected to be limited after customary adjustments and transaction costs.

• Cement business will be classified as held-for-sale and discontinued operations from Q2 2024, with an impairment charge of approximately DKK 700 million (non-cash impact).

• Certain legacy contracts and the Air Pollution Control asset are retained, fully provided for, and will not materially impact mining operations.

• Transaction expected to close in the second half of 2025, subject to regulatory approvals.

Financial guidance and outlook

• Financial guidance for 2025 remains unchanged: revenue around DKK 15 billion and adjusted EBITDA/EBITA margin of 14%-14.5%, now reflecting only the mining business.

• Transformation and separation costs of about DKK 200 million are included in EBITDA margin adjustment or excluded from adjusted EBITA margin.

• Cement segment guidance and long-term targets withdrawn; mining long-term EBITA margin target of 13-15% for 2026 remains unchanged.

• No material changes expected in tax rate, working capital, or investment levels post-transaction.

• SG&A reduction program underway to address cost structure in the mining business.