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Cement, we reached the agreement for exclusivity with a potential buyer And now we have a period of exclusivity where we are aiming to for closing of the sale of the cement. At the group level, we are welcoming two new presidents, Julian to be President for Mining Products Capital Business and Tony Larksonen as our Head of Services expected to join in in June. We also seized non core activities so that is now officially closed. So that segment does not exist. And there's more backlog and which is now part of the mining capital. We are very confident about our performance and therefore we increase our guidance for the full year. Regarding ESG and sustainability, we are advancing for the most of the KPIs well ahead of the plan and on last year only area which requires continued attention is safety. And safety mainly inside our own operations. Not at the customer sites. On the left, we are also highlighting areas that are high interest for the customer. In the area of sustainability, recycling of mill liners, We launched that in Antofagasta in Chile. CORSA flotation cell and then we got an order for largest tower mills, vertical mills in the world.
8m 45s
Were significant energy savings. We've been looking at tariffs and potential impact for the company. The conclusion is that it does not have any material impact on our operations nor for the profitability have fairly significant footprint inside USA most of the commercial terms are such that the customer will carry the extra cost of the tariff. And this is also one reason we were able to raise guidance for the full year. We don't expect anything material negative coming out of the tariffs. Tariff impact on the whole global economy is a different thing Of course, if the global economy would go into recession, that would impact all the companies around the world. But tariffs, as such, directly will not have a material impact on FLS. When we are looking at the market, service market is stable. And active. We had a slight softness in the first part of the year in North America, but it seems that the North America market in services, OpEx, is back in the business, so that softness is gone. Product market continues to be similar to last year, we haven't really seen any change in the market. And the activity in EPCMs what we actually referred in the previous calls, When visiting Chile a couple of weeks back, talking to major EPCMs, [indiscernible] Everybody is short of resources.
10m 39s
To to to attract, to do the work. That work is still study work, preparation for the projects, and we are expecting activity in the actual execution to pick up toward latter part of 2026. We continue to be leader in technology and that is very significant Even the smaller capital order intake we are highlighting the fact that we are getting significant orders there in terms of technical and cementing our position as a market leader. This is something that we wanted to highlight to you what we have done for the portfolio. This have had impact on profitability, and also for the volumes. So we have given up quite a bit of volume improve quality of earnings. NCA backlog non backlog when we started winding down the business was about SEK3.5 billion. We had lots of third party content in projects, on average 30% of what we sold and delivered was third party and we'll be scaling down labor basic labor services in all parts of the world. As a result, it have had roughly billion impact on our volumes. But as a result, in our estimate, the EBITDA percentage has gone up between 34%. So the portfolio choices ensure that we have a high quality order intake high quality revenue, and therefore very predictable business model.
12m 34s
At the same time, we have a full portfolio for mining flowsheet We have the best and fullest portfolio there. So we have not given up any critical elements in the process plant. We have everything what one needs to build the plant. Regarding order intake, we are happy with the order intake. It's at the level what we expected. We are still estimating Service order intake to be stable for remainder of the year and typically around 2.6 to 2,800,000,000 So this quarter was right in the middle of that estimate. I presented about portfolio pruning, the portfolio what we have and what are the cases in the marketplace we are happy with the EUR 1,000,000,000 order intake. Inside that EUR 1,000,000,000 order intake is also increased conversions of the pumps, meaning that the site sales selling pumps to existing installations and also winning key orders for technology. To highlight what I mentioned in the previous slide about scope, we announced yesterday Lloyd's iron ore, which is one of the future flow sheets for mining in iron ore beneficiation. We announced flotation order There was opportunity to take 30% more volume by having third party content in our order but we recommended customer to go direct to third parties rather than passing that through our books.
14m 26s
So by choice, we took the product order, technology order and recommended customer to call direct to third party regarding non non core technology. So we are very disciplined at the moment when we are taking orders, talking to customers so that we stick with the technology and services in our portfolio. As I said in the beginning, the big success of the quarter was service backlog and order backlog management and order execution. It shows that we've done improvements there, to the previous year where the revenues were slightly behind order intake now we can do the catch up. So very pleased about that improvement over the course of latter part of last year and the first quarter. And that of course ensures that we can deliver good results for the quarter and for the year. I said in the beginning that I feel that we are entering into category to become high quality company. And Adjusted EBITDA of 15.1 reported 13.7% is a sign of that one. We've every quarter continues, we are pushing up the the quality of the order intake, quality of the revenues. Is finally showing what we are doing and we are very proud of the result.
15m 58s
This has been hard work for two or three years and now we see the benefit of that one. Therefore we also increased our guidance for the year. We can't talk too much about cement sale but we have entered into exclusive agreement for the potential buyer, Pacific Avenue Capital Partners. Which is the financial sponsor private equity fund And criteria for going into exclusive period, the Pacific criteria is that buyer needs to be willing to take full perimeter of cement And also, we've been assessing about deal certainty. So full perimeter deal certainty were the key selection criteria for choosing Pacific to be shortlisted for the exclusive period with us. Seventh, order intake on the low side, slightly disappointing quarter for quarter one for [indiscernible] And we are expecting some recovery in coming quarters. Revenue very much in line with the expectation. And you can see that I'm going through the cement result quite fast. Because our expectation is that we could conclude the negotiations for the Pacific in the coming weeks and months. Adjusted EBITDA margin for Cement 9.5% and reported 8.6 Very proud of this one. It shows that same medicine what we've done for mining, derisking, focusing on service, pricing, all that is resulting in higher relative profitability as before.
18m 14s
Then handing over to Roland.
18m 16s
Thank you for that, Mikko. So having a look at the consolidated financial performance, as Mikko mentioned, our product portfolio, our pruning of our product portfolio as well as NCA is now out of the book. And hereafter, our revenue for the group is 4,700,000,000.0. And adjusted EBITA margin for the group of 139% and then reported EBITA margin of 12.6 and net profit and loss for the group of SEK $351,000,000. Gross profit continues up at a long time high 34.4%. It's driven by both mining and cement and both segments had good good share relatively strong share of service revenues in the in the quarter. Our SG and A cost compared to same quarter last year are flat and compared to Q4, it's down. It reflects that we continue our simplification and getting our global organization in place. Our administration cost have started to come down and it's offset so far by strategic investments in the sales side. So S, a bit up, A, a bit down. But the combination will come down in the quarters to come throughout the remainder of the year. So we will be at a different lower level as we come into 2026.
19m 58s
Grube EBITDA continues up, as mentioned by MECO 13.9%. And on the right hand side, we do the EBITA margin bridge where clear that most of this for this quarter is driven by a very healthy gross margin percentage. Our net working capital in line with our expectation 12% Payables are somewhat down and offset by work in progress asset and a bit reductions in trade receivables too.
20m 35s
That means our cash flow improves around CFFO minus 12% compared to minus $352,000,000 at the same quarter last year. And a free cash flow for the quarter after M and A of minus DKK120 million. And that means that our leverage ratio is flat on Q on Q, 0.4 x. Well below our capital structure target. And as we got off to a good start in mining, good start to the year in mining, we lift our financial guidance for the mining division from previously 13.5% to 14%. To now 14% to 14.5%. Cement guidance remain unchanged, that means that the group's guidance increased on adjusted EBITA margin from previously 12.5 to 13% to now 13% to 13.5%, And a reported EBITA margin for the group is lifted also half a percentage points to 11.5 to twelve point zero. Percent. And with that, I'll give you back to Mikko just to wrap up before we take Q and A. So as a summary, we are very confident about our performance the start of the year and for the full year, and that's why we upgraded our guidance. Supply chain works well now. Both for service and capital and we do have alternative sources for supply depending how the tariff situation will continue.
22m 20s
So I have full coverage on that one. And it will not have any material impact on profitability. And for the portfolio pruning, we reached target portfolio, meaning that we have become product technology company with a 65% to 70% share of the service. We are totally different profile as we were when we started this transformation journey. And we have all the key products in our portfolio. We have not given up anything that is significant for to the customers. And it's evident now that the investment into commercial front end is paying off. And we see growth in consumables [indiscernible] So both businesses show year on year growth.
23m 13s
And also that we are very happy that we have chosen Pacific and [indiscernible] exclusive negotiations about divestment of full cement perimeter and as I said before, criteria for selection is was full perimeter, and then deal certainty. So those were selection criteria for the party to be go exclusive. Then we go to the Q and A, please.
23m 50s
Thank you. We will now begin the question and session. Your first question comes from Christian Hinderaker from Goldman Sachs. Please go ahead. My first one is on the Mining mix. I guess curious whether basic labor contracts are now at zero And how do we think about the percent of service sales or orders more broadly across consumables, capital spares and refurbishments this quarter? And maybe you can remind us on the typical lead times for those [indiscernible] And then you flagged in the report hesitancy around capital equipment I wonder whether that's positive or negative currently for refurbishment and modernization. I'll start there.
24m 55s
Looking at the service, we have only one large labor service contract left. So in that sense, we might say that there's no materiality starts to be quite small. So you can consider that the portfolio is something what we want to have. Instead of basic labor service, we have professional services, which is high level services. Then looking at the service mix, the higher sales spare parts, Second highest is wear parts or consumables. And then the remaining maybe 25% or 30% maximum is is then professional services, upgrades, refurbishments. But by far, the largest portion is spare parts and consumer but we don't give out the exact percentages. Then we haven't seen any any big hesitation in upgrades and refurbishment. So in what we see in the activity is exactly as before. So we have seen no hesitation to do needed refurbishments or upgrades. And it's more about timing of the operations is For most of the customers, it's not a financial decision. It's more operative decision when it's good time to do those upgrades And then we've seen some customers in South America for example, upgrading and repairing meals. We've seen those orders actually coming in. And then you asked about capital spreads versus recurring spreads.
26m 34s
So it's not an exact number, in rough terms, the 70% of the spare part is annually recurring. And 20% is not annually recurring. But of course, that 30% will not go to zero maximum every year, but there's volatility there. So spare parts 70% annual recurring 30% is basically capital spares and there's more variability there.
27m 7s
Maybe the second one then. Just in terms of the SG and A cost ambitions, obviously, improvement on gross margins. But how do we think about the SG and A progress as we look ahead?
27m 22s
Yes. So the way to think it is that savings will come in gradually over the year. So did we did a lot in Q4. We also have done something in Q1. And there will be more pruning as we go through the year. So it will come in drift wise. In Q1, we still have a lot of people working here. We've done most of the salary increases as from first gen in most of world. And yet, as you see, costs is coming down, sales are slightly up. And the combo will come down slowly but surely throughout the year. So we're not going to give you numbers yet. We'll move forward. And then it will come by the end of the year.
28m 15s
Thank you, Roland. Maybe just a quick one. Cement gross margin delivery, I think you had an inventory write down last year in Q1. At the time, it wasn't quantified. Are you able to help us now with that magnitude?
28m 32s
No. No, we're not giving that granularity. I think [indiscernible] gross margin as you see it now is a relatively clean number. That should be helpful. Okay.
28m 49s
Your next question comes from Casper Blom from Danske Bank. Please go ahead. Pardon me, Kasper, your line is now live. Your next question comes from Kas Alma from Nordea. Please go ahead.
29m 18s
Thank you. Yes, also a few questions from my side.
29m 21s
The first one is, as you also mentioned in the presentation, is the growth you had within Pump and Cyclones of 10% year over year. And you also had some comments about the nature of this growth But could you put some more color to is it mainly successful testing in the mining sites that is triggering some conversion? Or it's more the usual customers that is buying more pumps? That will be the first question.
29m 47s
So it's dominantly conversions because the project activity is quite slow. So the sale of the project sales, meaning that it's part of the project package, the pumps and cyclones is muscle much below the normal level. So it's mainly success converting other brands out and replacing those with the Krebs, FLSmidth brand. So dominantly driven by site sales and conversions.
30m 19s
Congratulations. So we have been discussing this in the past you could actually offer these pumps at a rather huge discount and still making a good business case out of it. But if this growing 10% in the order intake means I guess, that you are getting a decent price on these pumps and cyclones. Is that the correct assumption?
30m 43s
So typically, where you see big discounts on pumps, you see as a part of the capital package so that if they are part of the big package, sometimes you see discounts there. But typically, you do site sales, you get full price, because reason to change out other pump is never commercial. It's always performance. So in that sense, there's no price competition at the site level. You see price competition when you are bidding a large package and then pumps as a part of that package. We'll side sales, product margin for pumps is actually at a really good level. Because it's a technical sell, performance sell, it's not a price sell.
31m 29s
Sounds good. Should we expect this 10% -ish level to continue throughout the year? Or is it some easy comps from last year?
31m 39s
We are pausing for year on year growth and whether it's 10% or or seven or eight, we don't know. But I think it's very promising start for the year. And of course, there's some variability between the quarters, but we are confident that we can grow year on year, but we don't give exact percentage of our internal targets.
32m 3s
Of course not. Okay. Then my second question is, I guess, to you, Roland. So you did 15.1% EBITDA margin within Mining Q1. How should we see this level compared to the 13% to 1527% guidance? Range.
32m 20s
Yes. So thank you for that, Claus. It's so first of all, the 15,000,000 is an adjusted number. And as I'm sure you've seen, half a percentage So I think you should look at it as a good quarter. It's an adjusted number Our reported number for the quarter is 13 so we are pushing, we are pushing towards the long term range. I'll leave it at that, Charles.
32m 59s
Sounds great. Fair enough, Hodan. Well done in this quarter. Think that was all for me. Thanks.
33m 10s
Your next question comes from Tore Fangman from Bank of America. Please go ahead.
33m 18s
Yes. Thank you for taking my question. Two from my side.
33m 22s
The first one would be your mining peers. More positive on mining equipment demand, strong growth rates here. So my question is, are you losing some market share here? Or is this rather due to the changes you made to your portfolio? That would be my first question. I'll come back with another one.
33m 40s
We're actually not losing any market We are rather increasing the markets because we are as I said, we are focusing on core technology. We don't think third party content in. And yesterday, we announced significant order from India for the iron ore flow sheet. The same customer gave us an order for the largest HPTRs in the world. Which we flagged before. And there we are basically dominating the market and also that 18 vertical mills and now we got the flotation And there is quite a lot of competition for the flotation, it seems that that our technology was superior there. So we don't think that we are losing any market share. We are rather increasing share in some of the products, but there's a big impact that for the last order as an example, we left more than 30% of volume to the table because we did not want to take third party content inflowing through our books And so that was the decision where we are very disciplined about quality of earnings, quality of the order intake, Whenever we can, we always push third party content out And then, of course, results that the deal, what was announced yesterday, is 30% smaller than what was on offer, but it was our conscious decision to focus on quality of the earnings technology and products not third party content in signing that agreement.
35m 15s
Very, very well understood. Thank you. And my second question would be, so you had a very strong margin now in mining in Q1. So I'm just asking myself compared to this, the guidance range that you listed up just looks like a small raise to me. And is this because you expect the revenue catch up effect that you had in Q1 to cease over the coming quarters and thereby losing some operating leverage? Or are there some other reasons for this? [indiscernible] So first of all, we had a zero five percentage point of what we did in Q1 was asset sales. We also had a relatively strong asset. Had 74% revenue from service business which is not a continued thing. And secondly, it's relatively early in the year and a lot of turmoil in the world and you know just adjusting upwards, a lot of uncertainty around certain parts of the world. So we found this this prudent. This is what we can stand by. What we are confident we can deliver. And and that was behind the the upward adjustment.
36m 30s
That's well understood. Thank you so much.
36m 38s
Thank you. Your next question comes from Lars Topholm from DNB Carnegie. Please go ahead.
36m 45s
Yes. Congratulations with the quarterly results. A couple of questions from me.
36m 52s
On the gross margin of 35.1% in Mining, how should we think about that? Looking ahead?
37m
Yes. And I think we've indicated 32, 34, even up to 35 if the service content is really high. But good average is around 33, which is sustainable And depending on the mix, if it's really, like, now high service mix, it can be pushed about 35, but underlying, if you start from the product margin in the company, we see big changes in product margin in order intake or revenue. And then if we, of course, manage the under absorption or the other light line items, so I think around SEK 35,000,000 is sustainable throughout the year.
37m 41s
Very clear, Nico. Then you have previously commented that in Mining to close the margin gap for Metso you need more top line And now it seems you are close to spinning off the Cement business. How should we think about that top line growth, which I guess, has to be inorganic When will we start to see Mining to M and A Will this be one big or many small acquisitions [indiscernible] you put on there?
38m 21s
So if I first focus on kind of organic growth potential, which is more incremental. And I think as Roland said earlier, still pushing for the SG and A and efficiencies. We can get can actually become still much more efficient. So we not happy with the SG and A level we have at the moment. So I think still continued work on SG and A and efficiency will actually close to gap quite well. But of course, then it becomes a volume And we actually then bolt ons, I think we have authority to do from the Board and then bigger acquisitions then we would need to pay it for the Board and come up with strategic direction for that one. But bolt ons, we still continue to do when those become available. But bigger ones, I think, strategic moves I think yeah.
39m 22s
So maybe I'm kind of twisting and turning your words to me, Cooper, but your sound more comfortable in closing most of that gap for Metso organically then when we spoke six or twelve months ago. Is that just Neo? Is that correct?
39m 39s
So I think Lars, if I can just so our long term target is 13% to 15% reported EBITA margin. Right? What Metro does is a little bit different. When then when when so that's what we stick to. Just to fully avoidance of doubt. Now what we are saying is in order get potentially better than that as we move forward, we will need to grow. So we will grow better than the market in our service business and we will grow with the market. With the current product portfolio as we have now in our products business. Then on top of that, we will do bolt on acquisitions and potentially larger acquisitions. If we can get them. That will bring us potentially further than our current long term targets in 2026.
40m 31s
And then a final question. Now you, of course, highlighted you're beginning to look like a quality company. And if I may be cruel here, quality companies have positive cash flows. So can you comment a bit on the bridge to a positive cash flow? But maybe more interest in the comment on what the cash flow like in mining isolated. I mean, you do an EBITDA of $5.59 before special items.
41m 3s
If I add back let's say, 50,000,000 of your total EUR 68,000,000 in depreciation, that's an EBITDA of $6.00 9 I assume most of the working capital change applies to mining Then you are, in round numbers, at SEK 180 That's before tax and before [indiscernible] Which basically means there's no cash flow lift Is that a rough calculation approximately correct? And what's moving [indiscernible] plays in when you look a little bit ahead where I assume you have an ambition of making a positive free cash flow No, no, that's not at all cruel, Lars. You're absolutely right. That's what needs to come. So the way we look at cash flow, Q1 is never a great cash quarter. This was better this year and considerably better than last year. This is the quarter with bonuses relatively to seasonally low and also tax payments and yada yada. But what we are saying this year we expect CFFO to be better than last year of SEK $640,000,000, but no more than SEK 1,000,000,000. And then then we can all run our numbers on the directional CapEx 2% to 3% of revenue we are giving. And then we also that our provisions on on especially other provisions needs to come to half over the next two to three years.
42m 35s
And when that happens and that will come in lumps our free cash flow will be positive and it has to be positive. Agree with that. So that's the type of of guidance we give on that for now.
42m 52s
And can you put a word on the net working capital ratio relative to sales in Mining stand alone?
43m
Yes. So most of our balance sheet is Mining. And that includes the net working capital. So most of it is mining. That also means if you want to we'll give later guidance if and when Cement will leave the company. We'll give an update on the ratios and so on. But that means you can assume that the current level of working capital will stay albeit with a lower revenue in mining, of course. I think that's what you are. And for. On your margin journey, and on that growth journey, [indiscernible] increase So the net working capital, if that's stays in nominal terms and revenue come become the pure mining revenue, then our ratio will be higher It won't have a negative cash flow impact It will be a mathematical change in the ratio. And the ratio will be more in line with peers.
44m 6s
That I understand. But then if you look two, three years ahead, will it then stay at the current ratio in mining? Or will that ratio increase?
44m 18s
Expectedly, that will be increasing slightly as we become more of a service company.
44m 27s
That's very clear. Great quarter, Really well done.
44m 37s
Your next question comes from Klaus Keld from the Credit Please go ahead.
44m 44s
Yes. Hello. Two questions from my side as well. First of all, just getting back to these in Mining. And I guess, yes, we are all pretty impressed. So I can ask in perhaps in a slightly different way.
45m 1s
Have you had perfect execution in Mining in this quarter? Or yes, how should we think about that? That will be my first question.
45m 11s
I will say very good execution, but far from perfect. So I think we still have a wrong to So I would I wouldn't call it perfect. But I think improvement compared to the past. And if I look at the margins above our gross profit, that order intake margin for Capital and Service, are stable year on year. And also the revenue product margin, top line margin is stable. So most of the swing between the kind of 35% what we saw now and then maybe 33% even down to 32% is for the mix So the underlying top line margins are rather stable. And of course, we are managing then the other line items between product cost gross profit, the best we can, so we have full attention. But they are quite stable at the moment. So there's no big movements in top line profitability, meaning product margin.
46m 12s
Okay. Okay. And then also a question to this pump and cyclone business. Could you talk a little bit about what kind of size this business has? Yes, we can't see that in your numbers. And talk a little bit about [indiscernible] global market share and what kind of one way you potentially could have in this business?
46m 35s
So we're not disclosing several product areas. But what we're saying on PCV which is sort of one area for us, is that we are we had a market share of around 10% and that is set to grow That is our ambition.
46m 56s
Yes. Okay. But you have a market share of around 10%. Okay. Then what's the market size?
47m 5s
That's a longer discussion, right? But you have major market player, which is Weir, right? And then you have then you have Metso in there as well and you have a tail end of of players in that market. We're not going to on this call give you specific numbers you're asking for. That is not disclosed.
47m 27s
Okay. Fair enough. Fair enough. Last question about this business. Could you just Could you just mention whether this margin in this business is above or below your margins for the year? Mining business?
47m 46s
So it's the highest. If you look at the businesses all combined, it's the highest margin business what we have.
48m 2s
Thank you. Your next question comes from David Barrel from Jefferies. Please go ahead.
48m 9s
Congratulations on the results A couple of questions. From me. Firstly, in terms of the Mining Service revenue growth, you specifically call out effective management of the order book there as driving that. Is that inferring that you've accelerated some service revenue into the first quarter from the second quarter and therefore that kind of service product mix will swing back quite sharply in the second quarter?
48m 36s
So we actually have not have done any acceleration. But if you look at last year, we're a little bit falling behind. So in the steady market, we have a slightly higher order intake than revenue, meaning that we slightly fell behind. So I think now we are more on top of our kind of order execution, meaning that this will be more steady going forward. And so there was no acceleration. It's that we just fell a little bit behind last year. You look at every quarter order intake and then revenue. So it's bit of kind catch up, but there's nothing unusual there. So we are letting everything to flow through the books and deliveries as they go through. So we haven't done any any any extra acceleration, just a better management of backlog and then supply chain.
49m 30s
Thanks for that clarification. And then my second question relates to the cement disposal Excellent news there. I think people maybe being a bit concerned given the macroeconomic backdrop that that might be kicked down the road. Can you give a bit more detail as to when you moved into exclusivity conversations and whether or not Pacific Avenue have got their financing in place for a transaction? Thanks.
49m 57s
So the information we give here is what we're going to limit ourselves to to to give you that information. We are disclosing the the party's name to send the signal that we are that the process is moving forward. And that's where we're going to leave it at. It's a delicate moment of that process. So whether there will be a transaction or not, will have to see. But that was the intention with that with that statement. And we we cannot give you the details that level of detail that you're asking for.
50m 33s
Okay. Thanks. I thought it was worth a try.
50m 36s
Fair enough.
50m 43s
Your next question comes from Casper Blom from Danske Bank. Please go ahead.
50m 50s
And sorry for being silent earlier. I some technical difficulties. A couple of questions also. Ole, I just wanted to follow-up on your comment regarding provisions You mentioned that other provisions were to roughly half over the next couple of years. Is it still also fair to assume that you'll be spending your restructuring provisions this year?
51m 15s
Yes. So theoretically, restructuring provisions should come to a close to zero. It never will. But most of that will be spent this year Yes. The other provision that we talk about is a bit more unpredictable for us because it's it's a bucket of stuff from from from the past. That we are solving as we move forward. And they you know, some of that may may come soon, some of it may take some more time. And we'll do it once and we are ready to to solve it and then we will pay it out or release it. Right? So that's how that works. That's why it's so hard for us to say whether it'll be one year, it'll be five years, so on. But for the planning purpose, you need to assume that we will cut that in half over over three years.
52m 8s
Okay. That super clear. Then a second question, maybe a little bit of speculative, but your current headquarters in Valpo and the potential sale of that. Is there any update on potential timing of that?
52m 26s
No. But we are running the process. So currently, bidders are showing interest. And then we'll see we'll see where we go with that. So it is in process, and we are set to move from here to the new location beginning of the New Year.
52m 46s
Okay.
52m 46s
But is it then also the target to have sold it when you're moving?
52m 50s
Yes. We're not going to give it away. But the intention is that we will sell it and then move. That's the intention.
52m 58s
Okay. Very clear. And then just a final one. You mentioned that you would probably get back with more details on the, I would say, targets for mining when you close the sale for cement. Should we expect sort of a several announcement in connection with also selling cement or will it be more sort of an update that you give us on the following quarter or etcetera? Just any kind of flavor as to what expect in terms of communication on that?
53m 33s
So I'd like to come back to that and a bit more structure. But I hope and when we sell the business, we will announce it And then new targets long term targets will only come later on. But directional guidance on working capital and CapEx spend and so on will come soon thereafter.
54m 2s
We have a follow-up question from Thor Fangmann from Bank of America. Please go ahead.
54m 8s
Thank you. Thank you once again for taking my follow-up question. Just one very quick clarification. So as understood in a way. The 15.1% margin in Mining was supported by 50 basis points coming from an asset sale. Could you just clarify this? And then one question. Why did you not adjust for this Thank you.
54m 31s
Yes. So in the P and L, we have a line called other income. And that's when we do bits and pieces. And there's been a few smaller asset sales that add up too. About zero five percentage point, 50 basis point, yes. That's right, for the quarter.
54m 47s
But you did not adjust for this down So it should be basically, if we would adjust for this, we would have been at 14.6% basically.
54m 54s
That's right, Jess.
55m 3s
This concludes our question and answer session. I would now like to turn the conference back over to the company for any closing remarks.
55m 11s
Thanks very much for the questions. And if I summarize the quarter, it has been a good quarter for us. And as we discussed earlier, we are moving in the of becoming quality company high quality order intake, high quality revenues, our SG and A is going down and then we are pushing for the efficiency. And we are happy with the portfolio that we have. We have a leading technology for all of the key flow sheets for in mining copper, gold, iron ore. Now we are building in India. So very pleased with the quarter. And we have a high level of confidence for full year despite the geopolitics and uncertainty. And for that reason, we increased the guidance and thanks very much for your time, and look forward talking to you soon again.
Key Insights
FLS entered into an exclusive agreement with Pacific Avenue Capital Partners for the sale of its Cement business, aiming for a full perimeter deal and high deal certainty, with the transaction expected to conclude in the coming weeks or months.
The company reported strong Q1 results, with group revenue at SEK 4.7 billion, adjusted EBITDA margin at 13.9%, and gross profit at a long-time high of 34.4%, driven by both Mining and Cement segments and a high share of service revenues.
FLS increased its full-year financial guidance: Mining division adjusted EBITDA margin raised to 14–14.5% (from 13.5–14%), group adjusted EBITDA margin to 13–13.5% (from 12.5–13%), and reported EBITDA margin to 11.5–12%.
The Mining business saw a strong service mix (74% of revenue in Q1), with spare parts and consumables as the largest contributors; order intake was stable, and the company emphasized quality of earnings by focusing on core technology and reducing third-party content.
SG&A costs are trending down due to ongoing simplification and restructuring, with further reductions expected throughout the year; free cash flow is expected to improve versus last year, and provisions are planned to be halved over the next three years.
