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FLSmidth sells Cembrit Holding

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World Cement,

FLSmidth has concluded its divestment of all interests in building materials companies with the sale of its shares in Cembrit Holding A/S to a company in the Solix Group AB for DKK1.1 billion. Cembrit is one of the leading distributors and manufacturers of fibre-cement products in Europe.

The buyer is a consortium of investors headed by Solix Group AB. Solix' strategy is to retain and further develop Cembrit, which has been part of the FLSmidth Group since 1927.

The Cembrit sales process was initiated in August 2012, but stalled in August 2013, as it was not possible at the time to find the right new owner of Cembrit. It was decided to postpone the sales process for a period of 3 – 4 years, during which a new Board of Directors, new sales initiatives and productivity improvements would be initiated, a process currently well underway. Recently however, FLSmidth was approached by the Solix Group who presented an attractive unsolicited offer leading to the agreement signed today. The transaction is expected to close in 1Q15.

"It's my firm belief that we on all parameters have reached a satisfactory agreement by divesting Cembrit to a new owner who wants to further develop and grow the business to the benefit of both employees and customers," says Bjarne Moltke Hansen, Group executive Vice President, FLSmidth.

Financial consequences of the sale

The sale of Cembrit is expected to have a positive impact on FLSmidth's profit from discontinued activities in 1Q15 subject to the closing balance.

The purchase price will be paid in three tranches. The first and second tranches will be paid in 1Q15, and the last tranche of DKK125 million will be paid 12 months after the closing date. 

According to IFRS accounting standards, Cembrit will be reclassified as discontinued activities in the Annual Report for 2014 and, consequently, the 2014 group guidance for FLSmidth is adjusted to exclude Cembrit.

As a consequence of the exclusion of Cembrit, FLSmidth's group guidance for revenue in 2014 is technically adjusted to DKK19.5 – 22.5 billion (previously DKK21 – 24 billion). The EBITA margin for the Group is still expected to be 7 – 9% and ROCE to be 11 –13%. The revenue of Cembrit in 2014 is expected to be approximately DKK1.5 billion and the EBITA-margin 3 – 5%.

Adapted from press release by

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