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FLSmidth: The 143-Year Journey of Denmark's Mining & Cement Pioneer
How a One-Room Consultancy Became a Global Mining Technology Leader—And Why It Just Sold the Business That Made It Famous
On a gray Copenhagen morning in January 1882, a 29-year-old engineer named Frederik Læssøe Smidth opened a door in his mother's apartment. Behind it sat his modest "Technical Bureau"—a single room that dealt with steam engines and mill machinery. He had no factory, no employees, and no grand vision of global dominance. What he did have was a lottery ticket that had paid out 2,000 crowns, just enough to fund a journey across Europe seeking inspiration.
Frederik opened the 'Teknisk Bureau' on Margrethevej in Copenhagen. Winning 2,000 crowns in a lottery gave him the opportunity to travel in Europe to seek inspiration.
That trip would prove fateful. Frederik returned with ideas that would transform his consultancy into one of the world's most influential industrial equipment companies. By 1957, FLSmidth's machinery powered approximately 40 percent of global cement production. The company would survive two world wars, multiple economic crises, and witness the complete reinvention of the construction industry—all while remaining headquartered in Denmark, a country with no significant mineral deposits of its own.
Now, 143 years later, FLSmidth has made a decision that would have been unthinkable to its founder: the sale of the company to private equity firm Pacific Avenue Capital Partners completed on 31 October 2025. The cement business that built FLSmidth's reputation has been spun off as Fuller Technologies, and the company is now a pure-play mining equipment supplier.
FLSmidth & Co. A/S is a Danish multinational technology company based in Copenhagen, Denmark. With almost 11,000 employees worldwide, it provides the global mining and cement industries with equipment and services. For the mining industry, the company provides technology for copper, gold, nickel, zinc and lithium mining. FLSmidth is listed on NASDAQ OMX Nordic Copenhagen in the C25 index and has offices in more than 60 countries worldwide.
This is the story of how a 19th-century Danish startup became a global industrial champion, how it navigated the most transformative period in mining history, and what its radical strategic pivot means for investors betting on the energy transition.
The Founding Era: Frederik Læssøe Smidth's Vision (1882-1900)
The cement industry we take for granted today barely existed when Frederik Læssøe Smidth began his career. Portland cement had been patented in England only in 1824, and while the material showed extraordinary promise for construction, producing it remained an artisanal, inefficient process. FLSmidth and Co. A/S was founded in Copenhagen on 2 January 1882 by Frederik Læssøe Smidth. It was initially a consultancy business whose main focus was to purchase machinery and build small machines for local craftsmen.
Frederick L. Smidth launched his engineering career in a single room in a building owned by his family. Smidth's earliest interests went toward developing steam-powered milling machinery and equipment. Before long, however, Smidth began to focus on building machinery for the brick and tile industry, and in 1884 completed his first large-scale contract for the construction of a tile works. Smidth's innovation was to build a works capable of operating year-round, a rarity in the industry.
This might seem like a minor achievement—year-round production—but consider the context. Most brick and tile works of the era were seasonal operations, constrained by weather and the availability of labor. Frederik understood that industrial scale required industrial consistency, and his engineering solutions delivered exactly that.
The strategic insight that would define FLSmidth came through his work in the tile industry. Smidth began hiring new employees, including Poul Larsen and Alexander Foss, who became partners in the company in 1887. At that time, the company was renamed FLSmidth & Co. By then the company's work for the tile industry had given it contacts with the growing cement industry. This led to Smidth being given a contract to build a complete cement plant in Limhamm, Sweden, finished in 1887.
The Limhamn contract was transformative. Building an entire cement plant—not just individual pieces of equipment—required FLSmidth to develop systems thinking that few competitors possessed. In 1887, Poul Larsen and Alexander Foss joined as partners, renaming the firm FLSmidth & Co., and the company constructed its first cement plant near Limhamn, Sweden, marking its entry into cement production technology. Subsequent projects included a cement works in Christiania (now Oslo), Norway, in 1888, and involvement in the Aalborg Portland Cement Plant in 1889. Expansion followed with the opening of the first international office in London in 1890, facilitating growth beyond Denmark.
What made FLSmidth exceptional was the engineering culture fostered by its three founder-partners. The Technical University of Denmark opened less than a generation before and soon grew to a very high standard and that developed an engineering culture that formed the basis for a number of companies to become world players. FLSmidth was founded by Frederik Læssøe Smidth, who had started at the University, and two partners. Of course it's not enough just to be a skilled engineer, and what it took here was the combination of these three engineer-entrepreneurs who saw the world as their battlefield. They literally went off in all directions: Alexander Foss sailed east to St Petersburg and sold the first kilns into Russia before the turn of the century. The other partner, Poul Larsen, sailed to the United States.
The company's technological edge emerged through two critical innovations. First, in 1893, FLSmidth acquired rights to the newly invented tube mill, which revolutionized grinding processes—particularly for sand cement production. Second, and more consequentially, by the end of the 19th century, FLSmidth had added yet another machinery specialty, becoming the first in Europe to develop a coal-fired rotary kiln in 1898. The company built its first two 18-meter rotary kilns that year, and went on to sell more than 2,000 rotary kilns over the next century.
The rotary kiln deserves particular attention because it represents the kind of step-change technology that separates generational companies from also-rans. Traditional shaft kilns were batch operations—load, heat, unload, repeat. The rotary kiln enabled continuous production, dramatically increasing throughput while reducing labor costs. He saw the great potential of the rotary kiln that had been invented in the US and how it could revolutionise the industry. He imported the first two of those to Europe and he put them up at the plant, Aalborg Portland, Denmark, which FLSmidth had founded. And then he obtained the licence to develop, manufacture and sell the kilns. From there on, FLSmidth has now reached well over 2,000 kilns, but it started with the two US kiln imports. And based on that technology FLSmidth went to the world market one year ahead of the competitors, who had also employed the rotary kiln technology from America.
By the time Frederik Læssøe Smidth died at just 49 years old, he had accomplished something remarkable: creating a company that had already established itself as the cement industry's technology leader. The founder was gone, but the company culture of engineering excellence and global ambition would endure.
Building the Global Cement Empire (1900-1945)
The early 20th century presented the perfect environment for FLSmidth's expansion. Smidth's technical expertise placed it at the forefront of the rapidly developing cement and concrete industries, not only in the Scandinavian region, but worldwide as well. The early 20th century saw the adoption on a massive scale of cement- and concrete-based building techniques. The need for new and more efficient cement production machinery and factories meant a steady stream of orders for Smidth. By the outbreak of World War I, the company sales had taken it to North and South America, across western and central Europe into Russia, as well as into the United Kingdom.
A pivotal moment came in 1906, when a major earthquake devastated San Francisco. The disaster created a sudden, massive surge in demand for cement to rebuild the city. A wave of investment washed over the cement industry—later nicknamed 'Cement Fever.' In 1906 alone, four new cement factories were built in Aalborg, Denmark, and the surrounding area, with FLSmidth supplying equipment for many of them.
The outbreak of World War I in 1914 disrupted FLSmidth's remarkable expansion. Denmark remained neutral, but the country was partly cut off from the outside world. To maintain its Copenhagen staff, the company pivoted to developing cement-making machinery for use in other, similar industries—an early example of the adaptability that would characterize FLSmidth's subsequent survival.
The company also continued to develop its technologies, and during the interwar period Smidth remained one of the cement industry's top innovators. Over the next two decades, the company rolled out important industry innovations such as the Tirax mill, Symetro gears, and the Unax cooler. These played an important role in improving the efficiency of the cement-making process.
FLSmidth invents the Symetro gear, which replaces mechanical features with various motors that can operate huge machinery. The Symetro gear has proven itself with unprecedented durability, with some still in use to this day.
In 1925, FLSmidth & Co. was registered on the Danish Stock Exchange as a public limited company—a milestone that provided capital for continued expansion while subjecting the company to the discipline of public markets.
Perhaps the most prescient decision in company history came as Europe descended toward World War II. Just prior to the outbreak of World War II, Smidth's management took the precautionary measure of transferring parts of its operations, including many of its technical plans and other documents, to its office in New York: A number of staff members moved to the United States as well. The move proved prescient, as the Nazi occupation of Denmark soon put an end to the group's normal business.
While the company navigated wartime restrictions in Copenhagen, its New York operations ensured business continuity and preserved irreplaceable technical knowledge.
One story from this era deserves special mention, not for its business impact but for what it reveals about the character of FLSmidth employees. Bernhard Arp Sindberg, the Danish administrator at FLSmidth's factory in Nanjing, China, opens the gates to thousands of civilians fleeing from the Japanese army during the Japan-China war. He is later nicknamed 'The Danish Schindler.' Sindberg's heroism, using FLSmidth's industrial facilities to shelter refugees, remains one of the most remarkable humanitarian stories from the period.
Post-War Dominance & the Conglomerate Era (1945-1989)
The reconstruction of Europe after World War II created the perfect conditions for FLSmidth's next phase of growth. Cities had been reduced to rubble across the continent, and cement was the indispensable material for rebuilding.
Business boomed for the company during the postwar era. The reconstruction of Europe, coupled with an extended period of economic prosperity throughout the 1950s and 1960s, created a new surge in demand for FLSmidth's machinery and plant engineering skills. By 1957, FLSmidth was able to claim that its machinery was responsible for approximately 40 percent of global cement production—a staggering market position for a company from a country of just 4 million people.
In 1954, FLSmidth inaugurated its head office in Vigerslev Allé in the Copenhagen suburb of Valby, becoming an iconic part of the city landscape with its highly praised red-brick buildings designed by architect Palle Suenson. The headquarters, which the company would occupy for seven decades, symbolized FLSmidth's arrival as a major Danish institution.
FLSmidth builds the world's largest rotary kiln for Dundee Cement Co. in USA. At a length of 232 metres, it reaches the limit of how large a kiln can be without it collapsing under its own weight.
However, the favorable market trends that had driven FLSmidth's success began shifting in the early 1960s as international competition intensified. Japanese and European competitors emerged with their own cement technologies, and the comfortable margins of the postwar era began compressing.
FLSmidth's response was a strategy that would have seemed sensible at the time but would later prove problematic: diversification. Over the years, the company expanded into non-core activities. By 1989 the entire FLSmidth Group consisted of some 125 companies within areas such as cement engineering, plastic, aerospace and cement building materials.
This conglomerate structure reflected the corporate thinking of the era—diversification as a defense against cyclicality. If cement markets softened, perhaps aerospace or plastics would compensate. But what looked like risk management was actually value destruction in disguise. Managing 125 companies across disparate industries required management attention and capital that could have been better deployed strengthening the core business.
FLSmidth also made massive bets on scale. The company built the world's largest cement plant in Missouri, capable of producing 12,000 tons of cement a day—a monument to industrial ambition that would test the limits of market demand.
By the late 1980s, FLSmidth faced a strategic crossroads. Its cement equipment business remained strong but faced increasing competition. Its diversified portfolio consumed management resources without creating meaningful synergies. The company needed a new direction—and it would find one in an unexpected place: the minerals processing industry.
INFLECTION POINT #1: The Fuller Acquisition & Minerals Entry (1990-2007)
The acquisition that would ultimately transform FLSmidth came in 1990 with a company that traced its own roots to the mid-19th century. Pennsylvania-based Fuller Company dates back to the mid-19th Century with the formation of the McKee-Fuller Foundry Company. Fuller Company later emerged in the 1920s when it started selling the Fuller-Kinyon pump, a pneumatic screw pump that simplified the handling of pulverised materials.
In 1990, the Group acquired Fuller Company and established the F.L.Smidth-Fuller Engineering Group. Two minerals processing divisions, Fuller Mineral Processing and FLSmidth Mineral Processing, were set up in FLSmidth and Fuller. In 1997, the company was named FFE Minerals after merging the two separate minerals divisions into one single company.
The Fuller acquisition brought something FLSmidth desperately needed: exposure to the minerals processing industry. While cement markets were mature and increasingly competitive, mining equipment offered exposure to the commodity supercycle that was beginning to build as China's industrialization accelerated.
Throughout the 1990s, product companies including Pfister, Ventomatic, and MAAG Gear were acquired. These bolt-on acquisitions expanded FLSmidth's product portfolio while adding complexity to an already sprawling organization.
The real strategic inflection came in 2002, when FLSmidth began implementing a new strategy that would prove transformative. In the beginning of the 21st century the Group began to continuously sell off non-core activities. The company announced its intention to exit production of machinery and systems for power generation and industrial processes, focusing instead on just two target industries: cement and minerals.
This strategic refocus required painful decisions. In 2004, the group sold off its Unicon cement production unit and its Aalborg Portland cement operation—the very cement plant where FLSmidth had installed Europe's first rotary kilns more than a century earlier. With the divestment of the company's only cement plant, a part of Danish industrial history came to an end. But the logic was sound: FLSmidth would be an equipment supplier, not a materials producer. Customer relationships mattered more when FLSmidth wasn't also a potential competitor.
The year 2007 marked a watershed. On 2 April 2007, FFE Minerals acquired Rahco International, Inc. In May 2007, FFE Minerals was renamed FLSmidth Minerals and on 10 August 2007, FLSmidth acquired GL&V Process, at that point the company's largest acquisition, enabling it to gain a foothold in the global copper industry.
The GL&V Process acquisition was particularly significant because it gave FLSmidth serious capabilities in copper processing—a metal that would become central to the energy transition story. In 2007, FLSmidth celebrated its 125th anniversary by awarding shares in the company to all 7,000 employees, a gesture that reinforced the company's Danish corporate culture even as it expanded globally.
INFLECTION POINT #2: The Acquisitive Growth Phase (2008-2012)
With the strategic decision to focus on cement and minerals now firmly established, FLSmidth embarked on an aggressive acquisition campaign designed to build a "full-flowsheet" offering for mining customers. The logic was compelling: rather than selling individual pieces of equipment into a processing plant, FLSmidth would offer integrated solutions covering the entire value chain from mine to refined product.
In May and October 2008, FLSmidth acquired Pneumapress Inc. and CEntry, an engineering consultancy based in Utah. In 2009, FLSmidth acquired Conveyor Engineering Inc. and EEL India Limited on 1 March 2009 and 28 July 2009 respectively. These acquisitions gave FLSmidth a know-how in design and supply of major bulk material handling systems for cement, mining, heavy industrial facilities and bagging equipment worldwide.
The year 2011 saw FLSmidth acquiring some major minerals and cement companies like ESSA Australia Limited on 17 February 2011, Phillips Kiln Service Ltd on 18 August 2011 and Transweigh India Ltd on 20 October 2011.
The 2012 acquisitions were particularly ambitious. On 3 July 2012, FLSmidth completed the acquisition of the Australian engineering and equipment supply company Ludowici Limited, a provider of coal centrifuges, vibrating screens and complementary wear resistant products and services for the minerals industries. In 2012, FLSmidth acquired Decanter Machine, Inc., a United States-based manufacturer and supplier of centrifugal technology to the global minerals industries, TEUTRINE GmbH Industrie-Technik, a German company specialised in mobile solutions for repairs, refurbishments and installation services, and Australian service companies MIE Enterprises Pty Ltd. and Mayer Bulk Pty Ltd.
Simultaneously, FLSmidth continued shedding non-core assets. In line with its heightened focus on core businesses areas such as cement and minerals, FLSmidth divested the capital sales of lime kilns and recausticizing equipment for use in white liquor plants in the pulp and paper industry. The business was divested to Metso Paper Sweden AB by means of a license agreement. The licence was perpetual and exclusive in relation to FLSmidth.
This combination of aggressive acquisition and strategic divestiture was reshaping FLSmidth into a fundamentally different company. Where the conglomerate of 1989 had been a sprawling collection of loosely related businesses, the FLSmidth of 2012 was emerging as a focused provider of mining and cement processing solutions.
The risk, of course, was integration complexity. Acquiring companies is easy compared to extracting value from them. Each acquisition brought new cultures, new systems, and new customer relationships that needed to be harmonized with FLSmidth's existing operations.
INFLECTION POINT #3: MissionZero & The Sustainability Pivot (2019-2021)
By the late 2010s, a new strategic imperative was emerging that would reshape FLSmidth's value proposition: sustainability.
At its Capital Markets Day held in Copenhagen in November 2019, FLSmidth launched MissionZero, a new sustainability programme aimed at significantly reducing emissions across the global cement and mining industries by 2030.
The timing was significant. Climate concerns were accelerating, and the industries FLSmidth served faced increasing scrutiny. Combined, minerals and cement production accounts for approximately 10% of all CO2 emissions. FLSmidth's customers were facing pressure from regulators, investors, and communities to reduce their environmental impact.
Thomas Schulz, then Group CEO, articulated the vision clearly: "With economic growth, urbanisation and growing populations comes the demand for infrastructure, such as housing, schools, hospitals and roads. Added to this, modern conveniences such as air conditioning, appliances and smartphones are high in demand, and renewable energy options such as electric cars, wind and solar energy are looked to as the future. All of that requires cement and minerals, and demand will only continue to rise. Today, we launch MissionZero to seize the opportunity to increase production and at the same time drive emissions towards zero."
FLSmidth estimates that it can reduce the CO2 emissions per kg cement by approximately 70% by 2030 by leveraging opportunities within existing pioneering technologies, innovation projects and early-stage R&D. To achieve this, FLSmidth is developing solutions such as blending clinker with alternative materials, exploring the use of new types of cements and providing solutions to cement producers to operate 100% alternative fuelled cement plants including waste-to-energy solutions. In addition, FLSmidth will accelerate solutions to close the remaining gap (30%).
For mining, the focus centered on water and energy. Water is a scarce resource in many parts of the world and represents a rising cost for FLSmidth's mining customers. The company has set a goal to offer its customers solutions that support zero water waste by 2030, building on the success of recent developments, such as its dry-stack tailings solution (DST). Utilising DST can recover up to 95% of process water while being economically competitive with alternative water management options such as desalination, even for high tonnages.
In 2021, FLSmidth signed up to the Science Based Targets initiative. We have set a science-based target to reduce scope 1 and 2 emissions 100% by 2030 from a 2019 baseline. We commit to reduce absolute scope 1 and 2 GHG emissions 100% by 2030, meaning that we will be carbon-neutral in our own operations. We have committed to reduce downstream scope 3 GHG emissions 56% per revenue from use of sold products.
MissionZero was not merely corporate greenwashing—it represented a genuine strategic pivot. FLSmidth recognized that sustainability would increasingly become a purchasing criterion for mining and cement companies. By developing technologies that reduced emissions, water usage, and energy consumption, FLSmidth could differentiate itself from competitors while commanding premium pricing.
"FLS established itself as a frontrunner in the space by taking a stance on accelerating sustainability in 2019 with its MissionZero commitment. While we are on an exciting journey with some of our early adopting partners, by and large the industry has not embraced the evolution. FLS is well-positioned, since for the past five years we have moved in a space that differentiates us as a market leader in innovation for sustainable practices."
INFLECTION POINT #4: The thyssenkrupp Mining Acquisition (2021-2022)
The acquisition that would fundamentally transform FLSmidth's scale and market position was announced in July 2021. FLSmidth and thyssenkrupp Industrial Solutions AG have reached an agreement that FLSmidth will acquire thyssenkrupp's Mining business (TK Mining) for a total consideration (enterprise value) of EUR 325 million, corresponding to approximately DKK 2.4 billion. Closing of the transaction is expected in H2 2022 and is subject to customary approvals from relevant authorities. TK Mining is a leading full-line supplier of solutions for mining systems, material handling, mineral processing and services, which is highly complementary to FLSmidth's offering. TK Mining has an asset light business model and is present in 24 countries with engineering and global service centres, and has close to 3,400 employees. In 2020, revenue was EUR 780 million with around one-third deriving from services.
Thomas Schulz, then Group CEO, described the strategic logic: "TK Mining and FLSmidth are a perfect match, and I am proud to announce this agreement to join forces. This is a truly transformational deal allowing us to accelerate our growth ambitions in mining by creating a stronger talent pool and one of the world's largest and strongest suppliers to the mining industry. Our complementary customer base and improved geographic coverage will offer a strong value proposition to our customers. There is a significant opportunity in transforming TK Mining towards FLSmidth's business mix and model in which higher margin service business makes up about 60% of revenue."
Thyssenkrupp's Mining equipment offering consisted of open-pit mining equipment and systems, mineral processing solutions and material handling solutions. It was primarily involved in crushing, conveying, grinding and processing, areas that are broadly complementary to our offering. We do have some overlap of technologies, but we see a clear complementary offering – especially in the areas of sustainability and digitalisation.
On September 1, 2022, one of the largest mining equipment and technology deals in history was completed as FLSmidth closed its acquisition of the Mining business of thyssenkrupp AG first announced in July 2021, following the approval from regulators globally. With immediate effect, thyssenkrupp Mining becomes part of FLSmidth.
The acquisition brought key technologies that strengthened FLSmidth's pit-to-plant capabilities. Key technology acquired to reduce the environmental footprint and digitalise mines from pit to plant include in-pit-crushing-and-conveying solutions, high-pressure grinding rolls (HPGR), large mine conveyors and OLCs (Over Land Conveyor), to name just a few examples.
Annual run-rate synergies of DKK 370 million (EUR 50 million) are expected by the end of year 2024 and integration costs are expected to be DKK 560 million (EUR 75 million) and will be phased over three years (2022-2024).
Following over 12 months of integration planning, involving a team of 250 people, the company is ready for a smooth start and to maintain, as far as possible, business as usual.
However, the acquisition also came with complications. With this, FLSmidth becomes the world's leading supplier of technology and services to the global mining industry. Following the integration of Mining Technologies, the proportion of FLSmidth's mining-related business increased to 65% of the company's operations.
Russia exposure presented a particular challenge. New business in Russia was suspended and contracts with non-sanctioned customers were being finalized to the extent possible. The outstanding order backlog from Russian activities amounted to around €43 million by end July 2022—a manageable but meaningful issue to work through.
The deal marked the beginning of a new chapter for FLSmidth. The company was now substantially larger, more focused on mining, and better positioned to serve the energy transition. But the acquisition also raised a natural question: if mining was the future, what was cement's role in the new FLSmidth?
INFLECTION POINT #5: The Pure-Play Mining Strategy & Cement Divestiture (2023-2025)
The answer to that question came in 2023, when FLSmidth embarked on what it called a "pure-play strategy." In 2023, FLSmidth announced the division of its operations into two stand-alone entities in a so-called "pure play strategy". The Mining and Cement divisions operate independently, each with their own business strategy and organisational structure.
In early 2023, FLSmidth embarked on a strategic journey with the announcement of new pure-play strategies for its mining and cement businesses. Since then, FLSmidth has simplified and rightsized both businesses to further strengthen their respective market positions, with a strategic focus on the core technologies and services required in the mining and cement industries. This has resulted in a significantly improved and more stable commercial and financial performance for both businesses.
On 29 January 2024, FLSmidth announced its intention to explore the available divestment options for its cement business, with the objectives of enabling the Cement business to maximise its full potential as well as to further strengten our Mining business' market-leading position as a full flowsheet technology and service provider to the global mining industry.
The decision to divest cement after 143 years was not taken lightly. Chair of the Board of Directors of FLSmidth, Mads Nipper, comments: "I am incredibly proud of what our cement business has achieved in its more than 140-year long history with FLSmidth. We firmly believe that this divestment represents a pivotal step in unlocking the full potential for both our mining and cement businesses. Our cement business is now well positioned for future success, with the flexibility to pursue its strategic ambitions and create exciting new opportunities for its employees to innovate and grow."
FLSmidth announced that it has entered into an agreement to divest its cement business to an affiliate of Pacific Avenue Capital Partners, a global private equity firm focussed on carve-outs and other complex transactions, for a total initial consideration of EUR75m, corresponding to approximately DKK550m (enterprise value), plus a conditional deferred cash consideration of up to EUR75m, corresponding to approximately DKK550m.
The FLSmidth Cement divestment story took a historic turn with the renaming of the company to Fuller Technologies. The sale of the company to private equity firm Pacific Avenue Capital Partners completed on 31 October 2025. Pacific Avenue then publicly rebranded the firm a few days later in early November 2025. FLSmidth Cement was sold as a complete operating business with all the intellectual property (IP), technology, employees, manufacturing facilities, sales and service organisations included.
The choice of name—Fuller Technologies—harked back to the 1990 acquisition. The decision to change the name to Fuller Technologies harks back to the history of FLSmidth and related companies. Pennsylvania-based Fuller Company dates back to the mid-19th Century with the formation of the McKee-Fuller Foundry Company. Fuller Company later emerged in the 1920s when it started selling the Fuller-Kinyon pump, a pneumatic screw pump that simplified the handling of pulverised materials.
"This is an exciting moment for our company," said Dennis Cassidy, CEO of Fuller Technologies. "As Fuller Technologies, we are embracing our legacy while charting a bold path forward as an independent leader in cement production solutions. In partnership with Pacific Avenue, we are energized to deepen our customer relationships, accelerate innovation, and expand our solution offerings. Our commitment to delivering high-performance, sustainable technologies remains unwavering."
Fuller will continue providing after-market parts and services for the cement production industry as well as new and replacement equipment for cement plants worldwide. The company has manufacturing locations in North America, Europe and Asia, and its global installed base spans over 1,400 of the world's approximately 2,700 cement plants.
Current Financial Performance & Market Position
The transformation is now bearing fruit financially. Group EBITA margin of 9.8% and net result of DKK 1,030m – the highest levels in more than a decade.
Gross profit increased by 8% to DKK 6,465m corresponding to a gross margin 32.0% (24.7% in 2023). Excluding transformation and separation costs of DKK 261m, the Adjusted EBITA margin was 11.0% in 2024.
The 2024 results represented a significant improvement: For the full year 2024, we reported improvements of 3.8 percentage points and 0.8 percentage points in EBITA margins for the Mining and Cement businesses, respectively, compared to the full year 2023.
Looking at 2025, the company has provided upgraded guidance. FLSmidth now expects an Adjusted EBITA margin of 15.0-15.5% (previously 14.0-14.5%). The upgraded Adjusted EBITA margin guidance incorporates the stronger-than-anticipated benefits from the ongoing implementation of our corporate model, driving further business simplification and operational efficiency.
FLSmidth now expects revenue of around DKK 14.5bn. The adjustment reflects the expectation of delayed project execution as well as adverse foreign exchange rate movements.
FLSmidth's Q2 2025 results demonstrate the company's successful transformation into a focused mining industry supplier with improved profitability despite revenue challenges. The divergent performance across segments highlights both opportunities and areas requiring attention, with the Service and PC&V segments delivering strong results while the Products segment continues to struggle.
The company's new segment reporting reflects its pure-play mining focus. Consequently, FLSmidth will as of Q2 2025 change its segment reporting to reflect that FLSmidth going forward will be a pure-play supplier of technology and services to the mining industry. As such, FLSmidth will as of Q2 2025 report on the following three continuing segments: Service, Products, and Pumps, Cyclones & Valves (PC&V). On average, the PC&V segment is expected to comprise approximately 25% equipment-related orders and 75% aftermarket-related orders.
The introduction of FLSmidth's first share buy-back program since 2012 represents a significant milestone in the company's shareholder value creation strategy. This program signals management's confidence in the company's financial position and future prospects, as well as a commitment to returning value to shareholders following its strategic transformation. The sale of the Copenhagen headquarters for DKK730 million and the divestment of the Cement business have generated significant capital, potentially enabling increased investment in high-growth areas or additional shareholder returns.
The stock has performed well. The stock has fluctuated within a day range of 404.2 to 420.8, while its 52-week range spans from 250.0 to 517.0. Shares in Flsmidth & Co A/S last closed at DKK427.60 and the price had moved by +14.27% over the past 365 days.
Leadership transition is underway. FLSmidth today announces that Chief Executive Officer, Mikko Keto, has informed the Board of Directors of his decision to step down from his position to assume an executive role with a non-competing company. Mikko Keto will continue in his current capacity in the coming months to ensure business continuity, while the Board of Directors advances a structured CEO succession process. It is expected that Mikko Keto will leave the company during H1 2026.
During his tenure as CEO, Mikko Keto has overseen a multi-year transformation of FLSmidth that has reshaped the company's strategic, operational and financial profile. Mikko Keto has been instrumental in driving a comprehensive portfolio rationalisation, consolidating the organisation into a more streamlined operating model and implementing effective cost-discipline initiatives. These efforts have greatly improved FLSmidth's commercial and financial performance, providing a resilient platform and positioning FLSmidth well for the next leg of its strategic journey.
Before FLSmidth, Keto worked for more than nine years at Metso, most recently as president of services and pumps. His earlier career includes senior roles at Nokia Networks and KONE. His experience at Metso—FLSmidth's primary competitor—gave him deep understanding of the mining equipment industry.
The Competitive Landscape & Industry Dynamics
FLSmidth now competes in a market undergoing profound transformation. Metso's biggest competitors in the mining industry include FLSmidth, Outotec and ThyssenKrupp, and in the construction industry Terex, Atlas Copco, Caterpillar and Sandvik.
Sandvik AB, Metso Outotec Corp, Terex Corp, ThyssenKrupp Industrial Solutions AG, and FLSmidth & Co AS are the top 5 processing plant suppliers in the world in 2021 by revenue. Cumulatively, the top 10 processing plant suppliers in the world generated revenue of $31,075 million, with average revenue growth of 16.8%, the highest revenue was generated by Sandvik AB ($9,991 million), followed by Metso Outotec Corp ($5,009 million).
The market is being reshaped by the energy transition. Metal mining held the largest share in 2022 driven by demand for minerals like copper, lithium, and nickel used in electronics and renewable energy technologies. Moreover, the rise in urbanization and industrialization further generates a heightened need for metals like copper, lithium, and nickel, crucial for applications in electronics, electric vehicles, and renewable energy technologies, which in turn boosts the demand for mining equipment. The rising demand for essential metals and minerals is pronounced as the transition towards clean energy.
In the NZE Scenario, demand for copper rises by 50% by 2040, while demand for nickel, cobalt and rare earth elements doubles, and graphite demand increases by four times over the same period, propelled by the substantial increase in battery deployment for EVs and grid storage. Of all the minerals, lithium stands out in this scenario with eightfold growth by 2040, highlighting its crucial role in batteries.
The market for energy transition minerals reached USD 320 billion in 2022 and is set for continued rapid growth, moving it increasingly to centre stage for the global mining industry. In response, investment in critical mineral development rose 30% last year, following a 20% increase in 2021. Among the different minerals, lithium saw the sharpest increase in investment, a jump of 50%, followed by copper and nickel.
The mining equipment market itself is projected for substantial growth. Looking forward, IMARC Group estimates the market to reach USD 232.60 Billion by 2033, exhibiting a CAGR of 4.30% from 2025-2033. Asia Pacific currently dominates the market, holding a market share of 61.9% in 2024.
The global Mining Machinery Market is undergoing a deep transformation. Equipment demand is being reshaped by electrification, automation, and the rising pressure to extract critical minerals that power modern mobility and digital infrastructure. Companies operating in this ecosystem are shifting from traditional diesel-driven fleets to more efficient, autonomous, and environmentally sustainable systems.
Investment Analysis: Bull Case & Bear Case
Bull Case
1. Structural Tailwinds from Energy Transition: The world cannot decarbonize without dramatically increasing mining. Electric vehicles require 6x more minerals than conventional cars. A single wind turbine contains 4.7 tonnes of copper. Solar panels, batteries, and grid infrastructure all demand materials that must be extracted and processed. FLSmidth's equipment enables this extraction while its MissionZero initiative positions the company as a partner for miners seeking to reduce their own carbon footprints.
2. Service Business Provides Stability: The shift toward service and aftermarket revenues—now comprising approximately 60% of mining operations—creates recurring revenue streams that smooth cyclicality. Once FLSmidth equipment is installed, customers are effectively locked into a multi-decade relationship for spare parts, upgrades, and technical services.
3. Margin Expansion Trajectory: The transformation has produced significant margin improvement. Moving from 6.0% EBITA margin in 2023 to 9.8% in 2024 demonstrates that operational improvements are flowing through to profitability. The 2025 guidance of 15.0-15.5% adjusted EBITA margin suggests further progress.
4. Full Flowsheet Offering: The thyssenkrupp Mining acquisition gave FLSmidth capabilities across the entire mining value chain—from pit to plant. This "one-stop-shop" capability simplifies procurement for mining customers while creating cross-selling opportunities.
5. Scale Advantages Post-Transformation: With the cement divestiture complete, management can focus exclusively on mining. Our simplification initiatives are delivering tangible results, reflected in an 11% year-on-year reduction in SG&A and an improved Adjusted EBITA margin of 15.3%.
Bear Case
1. Mining Capex Cyclicality: Mining capital expenditure is notoriously cyclical, driven by commodity prices that FLSmidth cannot control. When copper or gold prices decline, mining companies defer equipment purchases, compressing FLSmidth's revenues and margins.
2. Products Segment Weakness: Products revenue decreased by 40% compared to Q3 2024. The year-on-year decline was primarily a reflection of the subdued market conditions, resulting in a reduced order intake through the year as well as delayed execution of orders within certain product groups.
3. CEO Transition Risk: Mikko Keto's departure comes at a critical juncture. He led the transformation; his successor must execute the next phase of growth. Leadership transitions always carry execution risk.
4. Competitive Intensity: FLSmidth faces formidable competitors. Metso Outotec generates substantially higher revenues and has its own sustainability initiatives. Sandvik and Caterpillar bring significant resources and customer relationships.
5. Project Execution Delays: While engineering and planning activity continued at high levels in the quarter, the timing of project sanctioning remains highly uncertain, adversely impacting our Products order intake. Macroeconomic uncertainty and geopolitical tensions can defer project decisions, creating revenue timing risks.
Competitive Analysis
Porter's Five Forces Analysis:
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Threat of New Entrants (Low): Mining equipment requires decades of accumulated knowledge, global service networks, and customer relationships that create substantial barriers. Chinese competitors are emerging but lack the installed base and brand recognition of established players.
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Supplier Power (Moderate): Key components like specialty steels and hydraulic systems come from a limited supplier base, though FLSmidth's scale provides negotiating leverage.
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Buyer Power (Moderate-High): Large mining companies like BHP, Rio Tinto, and Vale can negotiate aggressively. However, switching costs are high once equipment is installed.
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Threat of Substitutes (Low): There are no viable substitutes for crushing, grinding, and processing equipment in mining operations.
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Competitive Rivalry (High): Competition from Metso Outotec, Sandvik, Caterpillar, and regional players is intense, with differentiation primarily through technology, service quality, and total cost of ownership.
Hamilton Helmer's 7 Powers Assessment:
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Scale Economies: Moderate. FLSmidth benefits from spreading R&D and overhead across larger revenue bases, but rivals achieve similar economies.
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Network Effects: Minimal in traditional equipment sales, though digital solutions could create data-driven advantages.
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Counter-Positioning: Strong. FLSmidth's MissionZero sustainability focus positions it against competitors slower to embrace environmental requirements.
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Switching Costs: High. Once installed, equipment creates multi-decade relationships for parts and service.
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Branding: Moderate. FLSmidth has strong brand equity with mining engineers, though not the household name recognition of Caterpillar.
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Cornered Resource: Limited. Technical talent is mobile across competitors.
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Process Power: Moderate. Accumulated knowledge in plant optimization and technology integration provides some advantage.
Key KPIs for Monitoring
For investors tracking FLSmidth's ongoing performance, three metrics warrant particular attention:
1. Service Revenue Growth Rate (organic): This measures the health of FLSmidth's installed base and its ability to capture aftermarket opportunities. Growth in service revenue typically carries higher margins than equipment sales and provides visibility into future earnings. A target of mid-to-high single-digit organic growth would signal healthy performance.
2. Adjusted EBITA Margin: The core profitability metric that captures the impact of operational improvements, cost discipline, and business mix shifts. With 2025 guidance at 15.0-15.5%, future years should show continued margin expansion as transformation costs subside and scale benefits accumulate.
3. Book-to-Bill Ratio: The ratio of orders received to revenue recognized indicates whether the business is growing or contracting. A ratio consistently above 1.0 signals expanding future revenues; below 1.0 suggests deteriorating demand. Book-to-bill ratio of 1.04 indicates healthy order intake relative to revenue.
Conclusion: The 143-Year Pivot
The story of FLSmidth is ultimately about adaptation. A company that began in a single room in a founder's mother's apartment has survived and thrived across three centuries by repeatedly reinventing itself.
From steam engines to cement kilns. From cement dominance to minerals processing. From scattered conglomerate to focused pure-play. Each pivot required courage, capital, and careful execution. Not all worked perfectly, but the company's willingness to embrace change rather than cling to past glory enabled its survival when countless competitors fell away.
The current transition—from cement-and-mining to mining-only—represents the most radical strategic shift in FLSmidth's history. The company has literally sold the business that gave it its name and reputation. But management believes the mining industry's transformation during the energy transition presents opportunities too valuable to share with the more mature cement segment.
"FLSmidth's multi-year restructuring is approaching its end, and the company is now entering its next phase, which requires an accelerated focus on driving profitable growth. The mining industry is expected to soon enter its next growth cycle, and FLSmidth is positioned better-than-ever before to reap the benefits from this."
Whether this bet pays off depends on factors both within and beyond management's control: the pace of the energy transition, commodity price dynamics, competitive intensity, and execution quality through a CEO transition. What's certain is that FLSmidth has positioned itself at the center of one of the most consequential industrial transformations in human history.
Frederik Læssøe Smidth's original insight—that specialization in emerging technology creates lasting competitive advantage—remains as relevant today as it was in 1882. The emerging technology has changed from rotary kilns to dry-stack tailings and high-pressure grinding rolls. The opportunity has shifted from urbanizing cities to electrifying transportation. But the fundamental strategic logic endures.
The next chapter of FLSmidth's story is being written now.
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