FLSmidth Group says it has entered exclusive negotiations with Pacific Avenue Partners over the potential sale of its cement business as part of its interim financial report for 1Q25.
Alluding to the US tariffs, the company pointed out that the US accounts for 20 per cent of its sales, with approximately half of its sales being US imports. While it says that mitigation measures (such as a large US manufacturing footprint) and flexible supply chains should mean limited direct impact on its operations it cautions that tariff-related uncertainty may delay larger investment decisions.
Commercial and financial performance
FLSmidth reported that cement order intake had decreased by 18 per cent compared to the equivalent period last year (12 per cent excluding currency effects and effects from divestments). Service order intake decreased by 14 per cent, primarily reflecting the divestment of the MAAG business in 1Q24. Products order intake decreased by 27 per cent driven in part by the divestment of the MAAG business as well as continued portfolio pruning. Service and products comprised 73 per cent and 27 per cent of the total cement order intake in the quarter, respectively (69 per cent and 31 per cent in 1Q2024, respectively).
Its mining order intake dropped by 10 per cent compared to 1Q24, while service order intake dropped by two per cent. Group order intake dropped by 12 per cent, with products orders (encompassing both the cement and mining business) experiencing the sharpest fall at 27 per cent.
Cement revenue for 1Q25 reached DKK3.7bn (US$557m), a 15 per cent YoY decrease, but with gross profits showing a 20 per cent gain to DKK325m, corresponding to a gross margin of 31.8 per cent (22.4 per cent in 1Q24). Excluding transformation and separation costs affecting the MAAG divestment of DKK9m, the adjusted EBITDA margin was 9.5% in 1Q25. Mining revenue increased by four per cent to DKK1bn, with gross profits rising by 13% to DKK1.30bn. Consolidated group revenue reached DKK4.70bn with gross profits at DKK16.3bn.
