FLSmidth (FLS) Status Update summary

Strategic transformation and business focus

• Achieved milestone of becoming a 100% mining-focused company after divesting the cement business, concluding a strategic journey started in 2023.

• Cement business divested to Pacific Avenue Capital Partners, including employees, assets, and technology, with closing expected in the second half of 2025, subject to regulatory approvals.

• Sale of the Valby head office provides a significant cash injection and supports a debt-free status, generating a net cash gain of DKK 730 million.

• Company transitions to a pure-play mining technology and service supplier, with management now fully focused on mining and increased capacity to pursue M&A opportunities and growth initiatives.

• All related employees, assets, intellectual property, and technology are included in the transaction, except certain legacy contracts and the Air Pollution Control asset, which are retained and fully provided for, with no material impact on the mining business.

Financial details and implications

• Cement business sold for an initial EUR 75 million (approx. DKK 550 million), with a potential earn-out of up to an additional EUR 75 million, subject to undisclosed objectives.

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

• An impairment accounting charge of approx. DKK 700 million will be recognized in Q2 2025, with no cash impact.

• Sale of the Valby head office will result in a net cash gain of DKK 730 million and an accounting gain of DKK 690 million, to be realized by end of Q1 2026.

• Certain legacy contracts and the Air Pollution Control asset are retained, with immaterial impact on mining operations.

Guidance and capital allocation

• Financial guidance for 2025 now reflects only the mining business: revenue around DKK 15.0 billion and adjusted EBITA margin of 14.0%-14.5%, with DKK 200 million allocated to transformation and separation costs.

• Share buyback program of up to DKK 1.4 billion (approx. 4.6 million shares) to be completed before the next AGM, starting June 25.

• Capital allocation policy remains flexible, supporting both organic growth, M&A (including larger acquisitions), and shareholder returns.

• Cement segment guidance and long-term targets withdrawn; mining long-term EBITA margin target of 13-15% for 2026 remains unchanged.

• Transformation and separation costs of around DKK 200 million are excluded from the adjusted EBITA margin.