Transcript fra FLS’ generalforsamling: Vi vil se på opkøbsmuligheder

I think we are ready to start. Its 4:00, dear shareholders, ladies and gentlemen. In my capacity of Chair of the Board, it’s a pleasure for me to welcome you to the Annual General Meeting of FLSmidth

Before we begin, I’d like to say to you that this is likely to be the last time that we hold the AGM on the premises in Valby, where we have been located as headquarters since 1956. In early 2026, we will relocate to the new office premises on [ Hannon ] in Copenhagen and that marks a new era for our company. So this relocation is more than just a physical change. It’s a simple of our development as a company and our constant focus on renewal and innovation.

With these words, I will go over to the AGM. We have on the Board, true to tradition, asked attorney-at-law, Klaus Søgaard, to act as Chairman of the meeting. So I’ll hand over the floor to you.

Thank you very much, and thank you for wanting to see my phase once again at this meeting. I need to find whether the meeting has been legally and lawfully convened and is [ quorate ] and also to act as moderator.

With regard to the legality, I found out in advance, and that’s going to be my conclusion that it is lawfully and legally convened. But I also need to say that we have to have the meeting before the end of April in the Greater Copenhagen area. There must be convening notice with a notice period of 3 weeks, primarily through the website, but also via e-mail and also stock exchange releases on that topic.

Participation today, 111 access cards of which 94 to shareholders have been issued. I see that the [ sun ] has won the lottery or rather the election because we are less than half those that have asked for access cards in the room. Out of the 94, 17 have given powers of attorney to the Board, 359 have used fill-in voting slips and asked the Board to vote on their behalf. And the — so many people have actually voted in advance either via power of attorney or else in other ways, that everything on the agenda will be adopted with a large majority.

So I will not carry out actual votes or ballots unless there is a specific request. I just want to say that in view of the votes cast in advance, and this will be apparent from a chart that I will out together with the protocol, there’s no need to have the votes. A simple majority is required for everything on the agenda, apart from the amendment to the Articles of Association 81 that requires 2/3 majority, but that majority is already available. The first item on the agenda will, as always, that’s 1 to 5 be dealt with in one go. So I will now give the floor to the Chair of the Board, Tom Knutzen, you have the floor, sir.

Thank you very much. ’24 was yet another good year for FLSmidth. We are still in a changing world characterized by macroeconomic and geopolitical uncertainty. At the same time, we are facing challenging markets in our 2 product areas, both in mining and in cement. Still, we’ve maintained our focus on the transformation of FLSmidth journey we started just over 2 years ago. .

In recent years — in recent year, we’ve reached important milestones in the business of strengthening our business and focusing on our core activities. This can be illustrated through the strong financial performance we delivered in ’24. Underlying earnings went up, both in Mining and Cement. And at corporate level in ’24, we delivered the highest result after tax for more than a decade. These financial results show that our strategic direction is the right one, both in mining and in cement.

As you know, the cement business is up for sale. Even at this time, I cannot give any further comment on that. I can say that the process regarding the sale is ongoing, such a process obviously gives uncertainty to an organization, particularly in the cement organization. Nevertheless, our colleagues in the cement organization have ensured that the business now delivers a strong, improved, more stable financial result, something we cannot be proud of.

Furthermore, in the year under review, we’ve made a number of commercial investments to support our long-term growth ambition in the mining business. I’m going to get back to these a little bit later in my presentation. At the same time, we have successfully — and that was important. We have successfully accelerated the reduction of noncore activities. Since the segment of noncore activities, which is established in the fourth quarter of ’22, we’ve reduced our order backlog there by more than 94%. We’ve had an overall loss from that segment of DKK 955 million, which is in line with our expectations. The removal of this segment has now been completely carried out. We are, therefore, in a stronger position. We can dedicate our focus and energy to developing the mining business.

Finally, we’ve shown a lot of progress in sustainability. Again, this year, we’ve increased the number of purchases from supplier that also have so-called [indiscernible] science-based targets, and we have considerably reduced emissions from our own operations. Furthermore, and this is essential in a great perspective, we’ve reduced emissions from the use of the products we have sold. This is really what changes things. But it’s not all parts of our sustainability agenda where we see progress. The safety of our employees is very important.

So it is disappointing that we did not reach our goal in that particular field. We are firmly determined to change the statistics and therefore, we’re implementing dedicated initiatives in knowledge sharing and training of ourselves and our employees so that we can avoid future accidents.

Also, we did not reach our goal for the share of female managers in the organization. And this was mainly because of the organizational changes implemented in ’24, where the number of layers of managers has been reduced. This has influenced in particular female managers because they were overrepresented in the functions that were affected. It’s our clear view that diversity promotes innovation. It creates better problem solving, and increases employees well-being and commitment.

We will, therefore, continue our work with — we will continue our work with focused employment procedures, engagement procedures so as to reach our goal in 2030. And our goal is that 25% of managers in the organization have to be women. All in all, ’24 was a good year for FLSmidth. We’ve seen progress in the extensive transformation of the company, but it’s also been a year characterized by major changes, changes that have taken a lot from everyone in the organization, both from the individual employee and for the organization as a whole.

We know the transformations are not just a matter of strategies and structures but also very much of our people. They can create uncertainty, change the well-known procedures and challenge the way we cooperate. We recognize that such changes can be demanding, and we respect the effort our employees and managers have done to adapt to the new terms. It’s not always easy to have to change and renew oneself, but we are convinced that these changes are necessary to ensure our future success.

The transformation of FLSmidth is an important step in our strategic journey. It makes us more robust, more focused and better equipped to maintain our strong position in the market, and really extend it really. Even if changes can be challenging, they also bring opportunities. With the joint effort and a clear direction, we can ensure the company is in a strong position in the coming years, both in terms of business and the organization.

One central element in our strategies for mining and cement is to create long-term value and create stable financial performance. Our exit from a project-based, very engineered heavy activities, combined with the streamlined risk management, where they have all contributed to a more stable, more predictable financial development. This strategic transition has not only reduced our exposure to risk-prone projects but also made it possible for us to focus on our core competencies and create long-term value for our customers and partners.

In 2014, we saw an improvement of 3.8 percentage points in the EBITA margin. So this is before interest and tax, right? And in mining, 3.8% and 0.8 percentage points in the cement business compared with ’23. In addition, we have delivered the highest EBITA margin and the net result at corporate level for more than a decade, a result that we can all be proud of here in FLSmidth. On the basis of our strong financial results in ’24, the Board proposes a clear increase of the dividend to our shareholders, a doubling from last year.

I’ll come back to that. We trust that our continued progress is a proof of the efficiency of our strategic initiatives. We are well positioned to reach our financial goals for ’26 and continue to deliver long-term value to our shareholders and customers. If you look at our financial guidance, our expectation for ’25, we do expect further improvement in our earnings in both mining and cement and also for the FLSmidth Group as a whole.

For mining, we expect the demand in the product business in ’25. There will continue to be characterized for customers postponing major CapEx decisions. The service market, on the other hand, is expected to be more stable and active. We do expect a small decline in revenue compared with DKK 24 billion to around DKK 15 billion, mainly a consequence of a relatively smaller order backlog at the start of the year.

On the other hand, we do expect progress in earnings, which can be seen in our expectation of an adjusted EBITA margin of between 13.5% and 14%. Expectations concerning the adjusted EBITA margin exclude cost of the transformation and separation and these costs totaled about DKK 200 million in ’25. In Cement, we expect the market in the short term to be challenged, remain challenged and to be affected by macroeconomic uncertainties. We’ll see what Mr. Trump does this evening. We expect a revenue in the Cement business of around DKK 4 billion and adjusted EBITA margin of between 9% and 9.5%.

Expectations concerning the adjusted EBITA margin for the cement business also excludes the cost of transformation and separation at the level of around DKK 50 million in ’25. As a result, we expect in ’25, total revenue for FLSmidth of around DKK 19 billion and adjusted EBITA margin of between 12.5% and 13% and that the reported EBITA will be between 11% and 11.5% when you take account of these transformation costs.

As mentioned in ’24, we focused on continuing our execution of the transformation of FLSmidth. We also spent [indiscernible] a large unutilized potential in order to benefit from our strong expertise in this field, we have reinvested many of the synergies we have achieved through the acquisition of Mining Technologies, we have invested them in strengthening the commercial front line of the PVC V business — the PC&V business, sorry, says speaker.

In the last year, we have strengthened our PC&V sales force considerably. We’re now beginning to see results of this targeted investment. We’ve also invested in strengthening our services in mining, including through the acquisition of a global supplier of engineering services, parts and mills, Farnell-Thompson and the German developer of new sensor technology with strong digital users in our mining portfolio that company is called Tipco. Furthermore, we’ve opened a number of new service centers. We’ve increased our production capacities to strengthen our value offering to and competitiveness towards customers.

These investments have a great potential. We’ll continue to identify and pursue these possibilities to improve our value, the value we offer customers. In ’24, our customers and associates have confirmed the strength of our market-leading portfolio and the value offering we make through a number of considerable commercial victories. Among these, there’s a record high number of orders for high-pressure grinding rolls, you can see a picture behind me, HPGR. This is an interesting mill technology. We became the market leader here after we acquired Mining Technologies. The HPGR technology offers considerable advantages in mining. This is particularly because the technology is very energy efficient, uses less water compared with other more traditional technologies.

We see great opportunities in the service market for HPGRs. This is what makes the technology very interesting for our strategic journey. The new orders and the comments we’ve heard in ’24, they strengthen our already market-leading position in HPGR technology. And to us, this is really — as customers really showing trust regarding the value creation from our HPGR technology, and we are a trusted partner in delivering the most efficient environmental friendly solutions.

Furthermore, in the year under review, we signed a strategic framework agreement with Enter Engineering, concerning the supply of a number of technologies and solutions for a new copper concentrator in Uzbekistan. This is expected to be one of the biggest copper concentrators globally, even in an uncertain mining market. We have secured a number of strategic important orders in the year under review. The resistant that our value offering gives us makes us able to navigate safely in the present market. We consistently deliver innovative reliable solutions that places us in a good position to meet changing customer needs and maintain our strong market position.

So we have delivered, and this is my main message, clear progress on our strategic journey, but there is still important work ahead of us. In ’25, we will maintain our focus on simplifying our business by continuing the implementation of our so-called on mining setup. This means streamlining our global ERP systems and the establishment of a principal company model that will ensure more efficiency and better coordination across our business areas.

Furthermore, we continue the implementation of our newly defined corporate model where we gather central functions in a smaller, more streamlined head office. The purpose is to have a clearer responsibilities — divisional responsibilities to strengthen cooperation and reduce administrative costs. In parallel, we will continue establishing our global business centers to increase efficiency, reduce costs and improve quality and delivery of support services throughout our organization.

We will strengthen our commercial focus to create a solid foundation for lasting long-term organic growth, which is the next big task. One crucial factor will be the optimization of our supply chains. So we can increase efficiency and the reliability vis-a-vis our customers. We also want to extend our market coverage to better service our global mining customers to strengthen customer relations by building up a deeper understanding of their needs and we will continue with product innovation to maintain our position in a very competitive market.

These initiatives have been selected carefully to ensure our user success. So we can hopefully deliver unique value for our customers and at the end of the day, also to our shareholders. Before I move over to the presentation of the remuneration report, I want to say a few words about capital allocation. FLSmidth has a constant focus on cash flow and to ensure that the company has a healthy balance sheet. We maintained a low financial gearing. At the end of the year, it was 0.5x the net interest-bearing debt to EBITDA. This is before interest tax and impairments, which is unchanged from the end of ’23, it is still far below our goal of max 2x.

The Board proposes that in that background, the background of the results for ’24, we pay out a dividend of DKK 8 per share, corresponding to a total dividend payment of DKK 461 million and a payout ratio of 45%. As previously mentioned, this dividend per share is a doubling of what we paid last year. This must be compared with our general goal, which is to pay out between 30% and 50% of the profits for the year as dividend to shareholders.

It is recommended by the committee for good corporate management and referring to the published report, and I want to review and comment on the remuneration of the executive management and Board of Directors. Let me start by saying that in ’24, there have been no deviations from the general guidelines for remuneration adopted by the AGM. The total remuneration for the executive management as the CEO and CFO registered with the Danes Business Authority was DKK 38.4 million compared with DKK 32 million in ’23. This increase of about DKK 6.4 million was because of the following.

First of all, the CEO and the CFO received increases in their basic fee of 6% and 3%, respectively and payments under the short-term incentive program based on performance, they were above the goals for parameters. So we did well. That’s it. Furthermore, both the CEO and the CFO have received shares so as to ensure the maintenance and execution of FLSmidth transformation over the coming year. The cost of the [indiscernible] of the CEO’s long-term incentive program, which runs until ’26 has been divided over time. So this has affected the line other incentive programs ’24, but it must be said that the amount has not been fully paid since this is kind of a saving within the program.

The Board — we received a total remuneration of DKK 7 million in ’24 compared with DKK 6.8 million in ’23. This increase was because of higher fees, provisionally adopted at the AGM in ’24. As you can see from Item 3 on the agenda, the Board proposes that the fee to the Board is maintained in ’25. No change there. But more about that when we come to Item 3 on the agenda. The Board carries out an earlier self-evaluation to evaluate the contribution and commitment and competencies of the individual Board member and our corporation as Chairman, I’m in charge of carrying out the evaluation.

I’m happy to say that the process has run very well. The overall conclusions of the evaluation are satisfactory, and the process helps define areas of work and to prioritize our future work. Now before we open up for the debate, and I give the floor back to the Chairman of the meeting. Just a couple of final comments from me. ’24 was an interesting year for FLSmidth. We continued our important transformation work. I’m very proud of our dedicated employees. They worked so hard to improve our business in a changing world.

It is clear to everyone that we are at a time with global uncertainties, obviously, leading to major challenges. But we also see opportunities, critical minerals, responsible and extraction of the — they are at the forefront of the political agenda, both naturally and internationally. With our market-leading technology and services, we are in a unique position to help meet this challenge and have a healthy business out of it.

We deliver the solutions that make it possible to extract minerals more efficiently, more responsibly and with less effect on the environment, thereby creating value both for our customers, for society and for our shareholders. So with that picture, I want to thank you for your attention and leave the floor to the Chairman of the meeting. Thank you for your attention.

That was presentation of the first 5 items on the agenda. It’s possible now to make comments, contributions, put questions. 3 people have already signed up to speak, but I will just give some — allow some time for others to join them. It is, of course, possible but you need to come to the rostrum.

First, ATP, the Danish labor market supplementary pension scheme.

Thank you. I’m Christian Gordon. I represent ATP, pension fund. Thank you for your report and the presentation of the accounts. Nevertheless, 2024 was another year with full focus on the transformation of the business. Both the integration of the German and the divestment of activities is a close chapter. And now you need to optimize your business. The market for mining equipment, as we know, is challenged. So your revenue is not at the level expected. But the elements that you control yourself have been fulfilled very convincingly.

The developments for some figures in the last couple of years speak their own language. With regard to 2025, it shouldn’t be difficult to fulfill EBITA interval of between 13% and 14% in ’26. It is not unthinkable that there will be a sale completed in the course of this year. So in other words, soon, you will be in an entirely different situation.

Historically speaking, mining business with a revenue of DKK 15 million and a good EBITA level. The current strategy period is not ended yet, but I have a question concerning your strategic deliberations and discussions. I’m quite sure that you already discussed the future strategy period. Growth in revenue is on the agenda, and acquisitions may also be important.

So based on a strategic perspective, what will the ideal journey be for FLSmidth in the short term? And which acquisitions would you consider to be most important to you? With regard to sustainability, I have a comment concerning the general reporting you do. As many other companies, you have produced your first [ CSR D ] report this year. I’m quite sure you put a lot of resources into it. I hope it also gave you some value internally. We see now that the EU has thrown everything up in the air and created some uncertainty with regard to the future situation for this reporting.

But no matter where it ends, it’s important for you that you — that and for other businesses that you report on the material things because if you report to broadly, the real message will drown in detail. My last comment is to the replacement of the Chairman of the Board. Tom, you are now saying goodbye after many years of service on the Board. Thank you very much from ATP and for an important contribution to creating the FLSmidth we know today.

And now you will hand over the baton to you [indiscernible] as well, good luck. Thank you very much to employees and management for 2024, and we look forward to the future.

Thank you very much, Christian, for your kind words. On behalf of myself and the company, I would like to say thank you for a good and constructive dialogue, as always. It’s important for us that we have this good connection with ATP. With regard to sustainability, well, it looks as if you were listening in on our meetings because first of all, some words of commitment to the reporting established by our team, but it is a massive document that you have to produce under the EU new rules and the Board has found that we need to focus on what really matters.

And that’s what we will do going forward. So no matter what the EU ends up with wanting from the businesses in their future system, we will focus on what is essential and what makes a difference. It is definitely important to us as a business, but it is also important to us that we can help our customers with getting their products right from an environmental point of view.

And then the big question, we see now that we are going through a considerable transformation process. I would like to say thank you to the executive management for having had the resources and the world to go ahead with this process. The Cement business, I will not give any comments on that. We are working to finalize that transaction. But growth is at the top of our agenda going forward.

So the question is how do we make sure that we get safety through the transformation process and that in due course, we start talking growth and that we don’t start spending money we haven’t got. But on the other hand that we all — so now where we want to grow, and there are 2 axes here. We think it’s important that depending on the market environment, we can report organic growth because that is a signal of your competitiveness and what you can offer customers.

And on top of that, we also want to do acquisitions that underpin the 3 main business areas. First of all, PC&V, Pumps, Cyclones & valves. That’s a very interesting area with a good earnings potential, but we don’t have awfully large market share. So it would be probably a good idea to focus on growth there. And if we can find the right companies in that area that matches our portfolio that is a priority.

Then we have consumables because in step with us being more spare part focused as a business, our service and parts business is in business area with stable earnings, and we want to strengthen our organization that is our production of consumables. We might also go ahead with acquisitions in this area if the right things crop up. And last but not least, there is in what I call core mining, the flow sheet, there are things that could be a good help to our business.

Cone crushers, perhaps, we should widen our offerings there. But it’s not as if we need something urgently, but we want to achieve critical mass. That was a broad answer. I know I did that on purpose. Organic growth before acquisitions and then we’ll take it from there.

The next speaker is the Danish Association of Shareholders.

Thank you. I’m sorry about my voice. My — I caught something from my wife. I think it’s a bad cold. I am [ Ben Santner ]. I represent the Danish Association of shareholders at this AGM of FLSmidth. We have about 16,000 members, and we look after the interest of small- and medium-sized shareholders in Denmark. And we work in order to develop a healthy share and investment culture in Denmark. And also to kindle the interest in investing in shares.

We are here today because we find the planned changes to FLSmidth extremely interesting seen from a shareholder viewpoint. We have read your annual report, and it raises a number of questions. I’ve divided my questions into 3 areas. We are interested in the parameters that affect the share price in a positive way, also the divestment of the cement business and then the geopolitical aspect. In the report for 2023, you stated that you expected an annual revenue growth of between 3% to 6% in the mining sector and growth in the cement sector representing the GDP growth.

But in 2024, revenue declined by 16.3% corresponding to approximately, well, just under DKK 4 billion, whereas the bottom line increased by 36.9%, corresponding to approximately DKK 530 million. It’s fine to have a good bottom line. But as a shareholder, we would also like — I’m sorry, I have to deal with my notes, we also are interested in a good top line in the long term, and we wanted to go upwards all the time.

What is the main reason for the large decline in revenue? And will we see a similar reduction in 2025. And the proceeds from the sale of the cement business is interesting to us because it could be used to invest in companies with a low leverage to acquire other businesses or to reduce the debt of FLSmidth. It could also be used to pay out dividend, but we would like you to use the proceeds to achieve growth. So the expected proceeds after the divestment of the cement business, have you any plans on what it will be spent on?

Secondly, the cement business. At the AGM last year, you said that the sale of the cement business was expected to be ready in late 2024. Why didn’t that plan follow through? And when do you expect the sale to be achieved? I know you don’t want to be too vocal about this sort of in public. But as a shareholder, it would be nice to know what’s actually going on. This year concerning the divestment of the cement business.

What is your expectation for the next 5 years in terms of revenue and bottom line in the remaining mining business after the divestment, you talked about DKK 19 billion in revenue and the bottom line has also been stated and it’s fine with a good bottom line but perhaps you could give us a more long-term view, for instance, for the next 5 years about bottom line and revenue.

And then the geopolitical aspect. You’re an international business, and you have activities all over the globe. It’s an interesting business, and we have been very pleased to be shareholders in 2024 because the share price did nothing but go up. But now in 2025, the situation has changed. There are lots of reasons for that. We have a new government in the U.S., there are conflicts in different parts of the world, in Ukraine, in Gaza. These are challenges and changes, but they both involve threats and opportunities. So could you give us an idea of how you intend to act in that changing geopolitical environment and what it means to you.

Thank you, and thank you to the Danish Association of shareholders for your interest in FLSmidth and thank you for your intervention. There were quite many questions. Fortunately, I was able to see them in advance, so that I could prepare a bit. Let me take them from one end. Your first question on revenue. Well, we would also like to see a top line growing. But it’s been no surprise that it hasn’t happened recently because of the transformation because we had a number of projects, a number of activities in our business, looking back in time that generated quite a lot of revenue, but very little earnings.

I think that they made losses, some of them actually. So we shut down that part of the business. So the business looks smaller, but it has better earnings. This is an important argument we’ve stopped taking the risk per on projects. We are focusing elsewhere. The journey where the revenue goes down, has to stop one day. We agree on that. And that’s why I said that going forward, we need to create our own organic growth. We’re not quite there yet. We need to get through ’25 with a slightly smaller order backlog.

We need to look a bit further ahead before we see growth. But this is our priority. And this may be a detail, but we have actually on big mines, where we have maintained equipment, deliver consumables and so on, but also sort of rented out workforce to work at the mine, gives a lot of revenue, a lot of trouble, but very little in terms of earnings.

So the quality of our revenue is healthier today. That’s been our priority. We’ll work on growth going forward. The proceeds from the sale of the cement business, I really can’t tell you anything more when you’re in the process, there are tactical things and also in the stock exchange. So the reasons you can’t comment. We are going on with it. We said it was happening at the earliest. Now it’s not surprising. We are in the process. As regard the proceeds, I started by telling you that our balance sheet is quite healthy.

And we would very much like to see if acquisition opportunities turn up that will fit our business. We will use our strong balance sheet, the proceeds from cement to meet these acquisitions. This is our first priority, investment in organic growth, value creating acquisitions. And third, if we can’t find these, we want to make sure that we do share buybacks or offer more dividend. We do not want to have too conservative balance sheet. So I think this is an ongoing assessment by the Board to find the right balance here. We don’t want to have shareholders money in our pocket and not spend it, but we certainly need money if acquisitions arise.

Now the expected earnings in mining and a 5-year plan? Well, we have focused on doing the transformation. And when management chaired by Mikko [indiscernible] said we want to do the transformation, we agreed on our financial goal for ’26. That is then our long-term guidance today. And I’ll be the first to tell you that ’26 is quite soon, right? So one of the tasks in the year end — in this year, it’s easy for me to say I’m resigning. But this year, we have to make a strategic that looks more into the future. When that has been prepared, I’m sure the company will communicate to the market what expectations are in the longer run. That’s all I can say today.

Your last question concerned geopolitics. Well, I think we all read the newspaper, don’t we, with some sort of anxiety every day. What we can see is that, well, there are a few overall comments I can give. The green transition is not going to stop. The green transition will not happen without minerals. We need more minerals and the existing mines are thought of being exhausted, so we need to find new minerals. So the market going forward will be there. It’s a big market, and this is our strategy to be ready to serve our customers in that regard.

The geopolitical aspects also mean that in the regions of the world, you need to ensure your own supplies and we need to be there to all customers. We need to be close to customers, whether they’re in 1 part or the other part of the world, Russia [ excepted ], we need to be able to service customers. And I see that as something that can give the global FLS organization quite good opportunities for growth and to benefit from the geopolitical uncertainty. There is a matter of the tariffs. That discussion, I mean the way that a large proportion of our customer products are being produced put together regionally how we can have different supply chains to choose where we want a given thing to be produced, right?

So we are more flexible when it comes to not being affected by a tariff war. We are in a better position than many other businesses who have large facilities for production in different locations. I’m sorry about the geopolitical position, but I hope we can benefit from it. I hope that was a satisfactory answer.

Thank you. Our third presentation is from [indiscernible] is Chairman of the Salaried Employees Association, and he is an employee representative on the Board of FLS. Over to you.

Thank you for giving me the floor. And I’m now the resigning Chairman of the Salaried workers Association. So I’m Vice Chairman now, but I’ve agreed with Henrik, who is the new Chairman that I’ll do this speech. Thank you for saying that I’m on the board of FLSmidth an employee representative that is true. There is a tradition for the employee federation to give a presentation here today. It is my privilege. On behalf of the employees in FLSmidth and Denmark to speak at this Annual General Meeting. This is the sixth time that I try to summarize. There were a couple of COVID years where I think my speech was read out, not presented, but still many years.

Let me try and summarize from an employee perspective. This is the essence of what I’m going to say. For us as employees, there have been many challenges in the year under review. Many challenges for FLSmidth. It’s been mentioned how are these challenges are. Well, the challenge is that it’s been decided the best way forward for FLSmidth is to focus on mining. So for that reason, there has been a divestment of parts of the company.

For instance, MAAG Gear. And as you may recall, some of us too at least, it was announced that the FLSmidth Cement was put up for sale. And as a result of that, the employees working in the cement business were transferred to another company FLSmidth Cement A/S. Part of this transformation is that many of the functions that used to be shared are now going to be separate, they’re going to be split up. This means that there are many changes, not only for the employees in cement, but also for many employees who are not in cement but who have been involved in these various functions.

So this is quite clear in FLSmidth Denmark, and it really has a big influence on all employees. If you look at the employees who are not in Cement but in FLSmidth A/S, here too, it’s been announced and mentioned that many of these functions that are in Denmark today will be relocated to the new global service centers. So a number of employees will lose their jobs here in Denmark. The jobs will go to Romania or Mexico or India or perhaps because of efficiency enhancements, they will be discontinuous on these jobs.

So we’re looking at the future where the FLSmidth group, FLSmidth & Company and subsidiaries in Denmark have much fewer employees in Denmark. I think we are down to such a small number that we look like the FLSmidth started in 1882. Yes, obviously, this is a process that — this is an ongoing process. It’s not been completed yet. To me, personally, as an employee as having worked for FLSmidth for many years, having great seniority, it is sad to see these changes that are happening in FLSmidth, both geographically and where we work.

Those [ divests ] that are up for sale, we hope for a future where we can develop as employees. I also have a cold, sorry about that says the speaker, I think I infected my wife, it’s the other way around. Anyway, both as an employee in FLSmidth and as a company, the uncertainty about the future as we heard also from the Chair of the Board. I mean nothing is sort of set in stone. It really affects all of us.

We had a place where FLSmidth is changing, for the employees in Denmark it will be a different site, we’ll have different functions. So we kind of share that even if we are in one part or the other of the business. But I’m proud to represent my colleagues despite the challenges that I mentioned, my colleagues do a sterling piece of work and help make FLSmidth a workplace that we really appreciate, not least because of the good colleagues you have and the the pride of working in a company that has meant so much to our customers and to ourselves for a very long time. It’s more than 140 years ago that FLSmidth was established. From the very outset, we’ve delivered world-class technology for the cement industry.

That was our basis back then. But quite early, we started to deliver technology for similar industries such as the paper and lime industry. And over history, we have — our bases has been a strong, competent supplier for cement factories and similar industries. Obviously, we’ve also seen over the years that the cement industry moves slowly, projects are complex. They take a long time. So the general trend has been that — has been an increasing use of cement at world level, but there have always been fluctuations in the short run. We’ve often talked in biblical terms about the 7 fat years and the 7 lean years. Perhaps it wasn’t even 7 of each, but still. There is no doubt that the main business area was cyclical in FLSmidth.

Previously, when you had the families owning, we have Smith, [ Fast and Larsen ], mainly Larsen I think, they did not consider not being an important supplier to the cement industry. And I think there was more patience about the business back then, when the families were the owners. In the future, we are looking at, it was decided to invest in activities not unlike the technologies on the cement business because it was seen back then that there were benefits from overlapping among these technologies.

But today, the assessment is that there are 2 big differences, even if technologies might look similar, there are 2 big differences between mining and cement with the structure that exists and the customer bases that exists customer base. So has also been mentioned, there are opportunities, and we see the result of that, opportunities of a better result in the business by focusing on services rather than projects.

So these changes, they have been really essential to the decision of splitting up the business, divesting the parts that don’t fit the business model, even if these decisions could be seen to be right, particularly perhaps from a financial perspective, it is still difficult and sad that FLSmidth is saying goodbye to our rootes in cement.

As Tom mentioned, we’re also saying goodbye quite soon to our head office here on Vigerslev Allé 77 here in Valby, we will relocate to our new head office at [indiscernible] here in Copenhagen. I’ve been in so many years, I can remember, there was a machine factory over there. That was divested many years ago. we can still see the remnants of the old holes. There are a few ventilator wings and a few gears lying around.

But it’s really the end of an era we are seeing just around the corner. It’s easy to be a grumpy old man. I don’t understand all the changes. And I will only be grumpy during my lecture time. I promise you. But if I and my colleagues put on the yes hat, we have to be happy and grateful for all the many good years here at the company with many experiences and challenges. And we can be excited, and positively excited about what going — and I’ve been talking a lot about cement, but it’s just as important with people in mining. They will have an interesting future. On behalf of the employees, I wish FLSmidth a safe and prosperous New Year. I also want to say to all the colleagues continuing in the divested companies and the existing company wish you all the best going forward. So happy sailings all of you. Thank you.

I think it would be most respectful to say I have listened and I respect you and the life I know is definitely not a grumpy old man. You’re on the board. I know you from there. I just want to agree with you, yes, things are changing massively. I’d like to add as the Chair of the meeting. Please don’t be grumpy to your children and please don’t pass on diseases or viruses to your wife.

Well, thank you to contribute to us up until now. Anyone else requesting the floor, now is the time to sign up. That’s not the case. Thank you.

Let us sum up. The first item on the agenda was the present and approval of the annual report. When the list of speakers has been exhausted, that’s it. Nothing you cannot change that. So it’s been presented and approved. The annual report has been approved; three, approval of the fees to the Board of Directors. It falls into 2 parts. Final approval of the fee level for 2024, which is approved together with the accounts. We just approved those and then the preliminary determination of fees for this year. And as we heard the Chairman said, the proposal is that there’ll be no change in the level of fees from ’24 to ’25.

This builds upon a base fee for — of DKK 475,000 and then a multiple by 2 for the chair — vice chair and a mutliple by 3 to the chair and then also fees for participation in committee work on the Board. Any comments? I take that as a sign that has been agreed.

Distribution of profit or covering of losses. The proposal is to pay out a dividend of DKK 8 per share. It can be reduced by the AGM, but not increased. So well, thank you, and congratulations to getting a dividend of DKK 8 per share. Then we have Item 5 presentation of the remuneration report 2024 for an advisory vote. We don’t need to have a ballot papers or anything. We just want to do this as it says here on an advisory basis. Thank you.

Election of members to the Board. It appears from the articles of Association in Article 12 that there must be 5 to 8 members of the Board elected by the AGM. There’s 6 now, and the proposal is in future to operate with 7 AGM-elected Board members. The current chair of the Board Tom Knutzen will resign when this meeting is over. And Daniel Lars Reimann will also leave the Board. And I will now give the floor to the Board so that he can introduce the subject himself.

Thank you very much. We find that in FLSmidth, we have a competent and active Board with representation of such competencies as are deemed to be relevant to the work to be done by the Board. We, therefore, propose that all candidates be reelected with the exception of me. I’ve been around now for 13 years. And this is the right time to leave and Daniel Reimann too will not be available for reelection.

Daniel, I’d like to say to you when you came, you came from Ulta. And it was interesting to see because you were elected at a time when also a major shareholder that you work for came on board. So sales excellence will be a term that we will never forget. On the Board, we have decided to nominate 3 new Board members. I will come back to them in a while. But first of all, I would like to say there are Christian Bruch, Mr. Rune Wichmann.

It will appear in the convening notice that we are dealing with 3 extremely competent candidates for the board memberships. They each bring very important competencies to the Board, and we are quite sure that they will contribute positively to the continued execution of our strategy. Christian Bruch will contribute with about 25 years of management experience in relation to energy and process technology. He is the current CEO of Siemens Energy. And the proposal is that he will be Vice Chair on the Board.

Rune Wichmann, please get up, you’re here, comes with expertise from private equity and consultancy, including strategy development, M&A, capital markets and finance and accounts. We need that, too. He is currently a partner with Altor Equity Partners. Lars Engström will contribute comprehensive global experience from mining and industrial sectors with leading positions with, among other things, Sandvik and Atlas Copco and Lars has several Board memberships and is currently a consultant in the industry.

All 3 candidates will be considered to be independent. Also — and this is not on the agenda, but I think we owe it to you to explain that we have had elections to the Board for — among the employees. So [indiscernible], are you over there? Thank you very much. You’ve been on the Board for 8 years. Thank you for good cooperation. I also want to say that to [indiscernible], who is right in front of me, you’ve been with us for 4 years in this capacity. And welcome to [indiscernible] Christensen, who is seated next to you. Life will continue on the board. So those are the 3 employee-elected Board members going forward after this meeting.

Thank you, sir, chairman of the meeting. Those are the candidates put forward by the Board and the proposal is also to increase the number of board members by one. Are there any other candidates or are there questions or contributions. If that is not the case, good luck with 1 more year to those who are reelected and to the company.

And thank you, Tom, from me as Chairman of the meeting for good cooperation. This brings us to Item 7, election of auditor. And here, there is a proposal to the effect that Ernst & Young be reelected. According to the new rules, you as an auditor, have to do both financial auditing and environmental auditing. We very rarely have alternative candidates for these elections at AGMs. So we have elected as Ernst & Young Godkendt Revisionspartnerselskab. Then we have proposals from the Board of Directors. This will amendment of Articles of Association requires 2/3 majority. But all the requirements have been met in advance. Also, this is actually a formality because it is a an extension of the authority already bestowed upon the Board with regard to being able to raise capital 10% 5 years at a time, and it is extended this time until the 2nd of April 2030. Any comments, I take this as being approved and now, again, a technical matter, standard agenda item in the time until the next AGM, this is an authorization to the Board to be able to acquire treasury shares. And then it says that it must be a total of 10% of the company’s share capital at the time of the authorization and so on and so forth. Any questions, comments? That is not the case. Thank you very much. This brings us to any other business. Item 9, you can be allowed to speak if you want to. There can be no resolutions or decisions made, but it’s possible to take up questions.

Okay. I will give the floor back to the resigning Chairman of the Board

Thank you very much, and thank you for taking us through the AGM professionally. So thank you to to the shareholders. Thank you for turning up here today, and thank you to those who chose to follow our web solution. At the beginning of my speech, I mentioned that we are still in a changing world undergoing constant change. I think that’s a fact. FLSmidth has had many roles in its more than 140 years of in systems, even if it might be a bit of a cliche, you can safely say that the only constant in the company’s long history has been change or perhaps even a renewal.

Renewal has always been a driver from the people who started FLSmidth until today. The decisions have been forward-looking, growth and relevance in the world undergoing change. This understanding of change as a natural necessary process is also behind my own decision after 13 interesting years on the Board, 3 years as Chairman, I have chosen to resign and not seek reelection. So it’s very important for me to thank the executive management, Mikko [indiscernible] and the others I really want to thank you for a good trusting relationship. You are busy. You really still are, and I really want to thank my colleagues on the board, thank you for our excellent cooperation throughout the years. It’s been a great honor for me to be part of this journey, and I’m quite proud of what we have achieved together. without belittling the emotional elements of what we’ve had to do.

Thank you to the shareholders for your continued support to our ambitious transformation, I would call it. I also like to thank the opportunity to welcome new shareholders that have joined since the last general meeting. And I really want to thank all the employees of FLSmidth no matter where they work, in Denmark or abroad, you have shown enormous adaptability during a time where we had to change. Mads, you will be the coming Chairman. I want to wish you all the best. I wish the company all the best and the new Board, all the best and the employees. Hope you’ll take good care of FLSmidth, I’m sure you will. You will support our values. And this is then the end of today’s AGM. I wish you all a good evening, get home safely. Thank you. Bye-bye.