Flsmidth & Co A/S B Shs

Welcome to FLSMIT quarter one 25 earnings call. We are very pleased about the result that we were able to deliver on quarter one. The highlights are that we exceeded expectations with the order execution in service. Backlog management, supply chain, the improvements what we've done in that area are now visible in higher than expected revenue. And of course, service revenue is driving the profitability. Very pleased with that one. Order intake both in capital and service is in line with our expectations and we see areas for growth inside those numbers and we've seen growth in consumables and also pumps and cyclones related capital orders. So those are two areas that we've seen year-on-year growth. Adjusted EBITDA. 15.1%. It means that we are now in the category of a quality company. That is a big milestone for us. We want to become and be the quality company in 2025. It means high quality order intake for products, high quality order intake for services, predictable high margin revenues. In cement, we reached the agreement for exclusivity with a potential buyer. And now we have a period of exclusivity where we are aiming for closing of the sale of the cement. At the core level, we are welcoming two new presidents, Julian to be president for mining products for capital business, and Toni Laaksonen as a head of services, expected to join in beginning of June. We also seized non-co-activities, so that is now officially closed, so that segment does not exist. and there's more backlog and which is now part of the mining capital. We are very confident about our performance and therefore we increase our guidance for the full year. Regarding ESD and sustainability, we are advancing with most of the KPIs well ahead of the plan and last year only area which requires continued attention is safety. And safety mainly inside our own operations, not at the customer sites. On the left, we are also highlighting areas that are high interest for the customer in the area of sustainability. Recycling of mill liners. We launched that in Antofagasta in Chile. Corsair flotation cell. And then we got an order for largest tower mills, vertical mills in the world with significant energy savings. We've been looking at tariffs and potential impact for the company and the conclusion is that it does not have any material impact on our operations nor for the profitability. We have fairly significant footprint inside USA and most of the commercial terms are such that the customer will carry the extra cost of the tariff. And this is also one reason we were able to raise guidance for the full year. We don't expect anything material negative coming out of the tariffs. Tariff impact on the whole global economy is a different thing. Of course, if the global economy would go into recession, that would impact all the companies around the world. But tariffs as such directly will not have a material impact on FLS. When we are looking at the market, service market is stable and active. We had a slight softness in the first part of the year in North America, but it seems that the North America market in services, OPEX, is back in the business, so that softness is gone. Product market continues to be similar to last year. We haven't really seen any change in the market. And the activity in EPCMs, what we actually referred in the previous course, when visiting Chile a couple of weeks back, talking to major EPCMs, everybody's still super busy. Everybody's short of resources to attract, to do the work. That work is still study work, preparation for the projects and we are expecting activity in the actual execution to pick up toward the latter part of 26. We continue to be a leader in technology, and that is very significant. Even the smaller capital order intake, we are highlighting the fact that we are getting significant orders there in terms of technical references and cementing our position as a market leader. This is something that we wanted to highlight to you, what we've done with the portfolio. This has had an impact on profitability and also for the volumes. So we have given up quite a bit of volume to improve quality of earnings. NCA non-core backlog when we started winding down the business was about 3.5 billion. We had lots of third-party content in projects. On average, 30% of what we sold and delivered was third-party. And we've been scaling down basic labor services in all parts of the world. As a result, it has had roughly 3 billion impact on our volumes. But as a result, In our estimate the EBITDA percentage has gone up between three and four percent. So the portfolio choices ensure that we have a high quality order intake, high quality revenue and therefore very predictable business model. At the same time, we have a full portfolio for mining flow sheet. We have the best and fullest portfolio there. So we have not given up any critical elements in the process plant. We have everything what one needs to build the plant. Regarding order intake. We are happy with the order intake. It's at the level what we expected. We are still estimating service order intake to be stable for remainder of the year and typically around 2.6 to 2.8 billion DKK. So this quarter was right in the middle of that estimate. As I presented about portfolio pruning, with the portfolio what we have and what are the cases in the marketplace, we are happy with the one billion order intake. Inside that one billion order intake is also increased conversions of the pumps, meaning that the site sales selling pumps to existing installations and also winning key orders for technology. To highlight what I mentioned in the previous slide about scope, we announced yesterday Lloyds Iron ore, which is one of the future flowsheets for mining in iron ore beneficiation. We announced flotation order. There was opportunity to take 30% more volume by having third-party content in our order. But we recommended customer to go direct to third parties rather than passing that through our books. So by choice, we took the product order, technology order, and recommended customer to go direct to third party regarding non-core technology. So we are very disciplined at the moment when we are taking orders, talking to customers, so that we stick with the technology and services in our portfolio. As I said in the beginning, the big success of the quarter was service, backlog management and order execution. It shows that we've done improvements there to the previous year where the revenues were slightly behind order intake. So now we can do the catch up. So very pleased about that improvement over the course of latter part of last year and the first quarter. And that of course ensures that we can deliver good result for the quarter and for the year. I said in the beginning that I feel that we are entering into category to become high quality company and adjusted EBITDA 15.1 reported 13.7 is a sign of that one. With every quarter continuous we are pushing up the profitability, improving the quality of the order intake, quality of the revenues and it's finally showing what we are doing. And we are very proud of the result. This has been hard work for two or three years, and now we see the benefit of that one. And therefore we also increased our guidance for the year. We can't talk too much about cement sale, but we've entered into exclusive agreement for the potential buyer, Pacific Avenue Capital Partners. which is a financial sponsor, private equity fund. And criteria for going into exclusive period for the Pacific, our criteria is that buyer needs to be willing to take full perimeter of cement. And also we've been assessing about deal certainty. So full perimeter, deal certainty were the key selection criteria for choosing Pacific to be shortlisted for the exclusive period with us. Seventh. Order intake on the low side, slightly disappointing quarter for quarter one for services and we are expecting some recovery in the coming quarters. Revenue very much in line with the expectation. And you can see that I'm going through the cement result quite fast because our expectation is that we could conclude the negotiations for the Pacific in the coming weeks and months. Adjusted EBITDA margin for cement 9.5 and reported 8.6. Very proud of this one, it shows that same medicine what we've done for mining, de-risking, focusing on service, pricing, all that is resulting in higher relative profitability as before. Then handing over to Roland.

Thank you for that Mikko. So having a look at the consolidated financial performance as Mikko mentioned, our product portfolio, our pruning of our product portfolio as well as NCA is now out of the book. And hereafter, our revenue for the group is 4.7 billion and adjusted EBITDA margin for the group of 13.9 percent and reported EBITDA margin of 12.6 and net profit and loss for the group of 351 million. Gross profit continues up at a long-time high, 34.4%. It's driven by both mining and cement, and both segments have good share, relatively strong share, of service revenues in the quarter. Our SG&A costs compared to same quarter last year are flat and compared to Q4 it's down. It reflects that we continue our simplification and getting our global organization in place. Our administration costs have started to come down and it's offset so far by strategic investments in the sales side. So S a bit up, A a bit down. But the combination will come down in the quarters to come. throughout the remainder of the year, so we will be at a different lower level as we come into 2026. Group EBITDA continues up as mentioned by Mikko 13.9% and on the right hand side we do the EBITDA margin bridge where it's clear that most of this for this quarter is driven by a very healthy gross margin percentage. Our net working capital in line with our expectation 12%, payables are somewhat down and offset by work in progress asset and a bit reductions in trade with receivables too. That means our cash flow improves around CFFO minus 12% compared to minus 352 million at the same quarter last year and a free cash flow for the quarter after M&A of minus 120 million. And that means that our leverage ratio is flat on Q&Q 0.4x, well below our capital structure target. And as we got off to a good start in mining, a good start to the year in mining, we lift our financial guidance for the mining division from previously 13.5 to 14% to now 14.0 to 14.5%. The cement guidance remains unchanged. That means that the group's guidance increased for an adjusted EBITDA margin from previously 12.5 to 13% to now 13 to 13.5%. And a reported EBITDA margin for the group is lifted also half a percentage point to 11.5 to 12.0%. And with that I'll give you back to Mikko just to wrap up before we take Q&A.

So as a summary, we are very confident about our performance at the start of the year and for the full year and that's why we upgraded our guidance. Supply chain works well now. both for service and capital and we do have alternative sources for supply depending how the tariff situation will continue. So I have full confidence on that one and it will not have any material impact on our profitability. And with the portfolio pruning, we've reached the target portfolio, meaning that we have become product technology company with a 65 to 70% share of the service. So we are totally different profile as we were when we started this transformation journey. And we have all the key products in our portfolio. We have not given up anything that is significant to the customers. And it's evident now that the investment in the commercial front end is paying off and we see growth in consumer pools and pump cyclones as well. So both businesses show year on year growth. And also that we are very happy that we have chosen Pacific and entered exclusive negotiations about divestment of full cement perimeter. And as I said before, criteria for selection was full perimeter and then deal certainty. So those were selection criteria for the party to go exclusive. And then we call to the Q&A, please.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Your first question comes from Christian Hinderaker from Golden Sacks. Please go ahead.

Hi, Miko. Hi, Roland. Hi, Andreas. Thank you for the presentation. My first one is on the mining service mix. I guess curious whether basic labour contracts are now at zero and how do we think about the percent of service sales or orders more broadly across consumables, capital spares and refurbishments this quarter? And maybe you can remind us on the typical lead times for those pieces. And then you flagged in the report hesitancy around capital equipment. I wonder whether that's positive or negative currently for refurbishment and modernization. I'll start there.

Looking at the service, we have only one large labor service contract left. So in that sense, we might say that there's no materiality starts to be quite small. So you can consider that the portfolio is something what we want to have. Instead of basic labor service, we have professional services, which is high-level services. Then looking at the service mix, the highest share is spare parts. Second highest is wear parts or consumables and then the remaining maybe 25-30 percent maximum is then professional services, upgrades, refurbishments but by far the largest portion is spare parts and consumables but we don't give out the exact percentages. Then we haven't seen any big hesitation in upgrades and refurbishments. So in what we see in the activities exactly as before. So we have seen no hesitation to do needed refurbishments or upgrades. And it's more about timing of the operations. For most of the customers, it's not a financial decision. It's more operative decision when it's good time to do those upgrades. And we've seen some customers in South America, for example, upgrading and repairing mills. We've seen those orders actually coming in. And then you asked about capital spares versus recurring spares. It's not an exact number, but in rough terms, the 70% of the spare part is annually recurring and 20% is not annually recurring. But of course, that 30% will not go to zero maximum every year, but there's volatility there. So spare parts, 70% annual recurring, 30% is basically capital spares, and there's more variability there.

Thank you, Miko. Very clear. Maybe the second one then, just in terms of the SG&A cost ambitions, obviously good improvement on gross margins, but how do we think about the SG&A progress as we look ahead?

Yeah, so the way to think of it is that the savings will come in gradually over the year. So we did a lot in Q4. We also have done something in Q1. And there will be more pruning as we go through the year. So it will come in. In Q1 we still have a lot of people working here. We've done most of the salary increases as from 1st of Jan in most of the world. And yet as you see administration cost is coming down, sales are slightly up and the combo will come down slowly but surely throughout the year. So we're not going to give you numbers yet. We'll move forward. and then it could come by the end of the year.

Thank you Roland. Maybe just a quick one. Cement gross margin delivery. I think you had an inventory write down last year in Q1. At the time it wasn't quantified. Are you able to help us now with that magnitude?

No, no, we're not giving that granularity. I think the gross margin, as you see it now, is a relatively clean number. That should be helpful.

Okay, thank you.

Thank you. Your next question comes from Kasper Blom from Danske Bank. Please go ahead. Pardon me, Kasper, your line is now live. Thank you. Your next question comes from Klaus Alma from Nordia. Please go ahead.

Thank you. Yeah, also a few questions from my side. The first one is, as you also mentioned in the presentation, is this growth you had within pump and cyclones of 10% year-over-year. And you also had some comments about, you know, the nature of this growth. But could you put some more color to, is it mainly, you know, successful testing in the mining sites that is, you know, triggering some conversion? Or is more the usual customers that is buying more pumps? That would be the first question.

So it's dominantly conversions because the project activity is quite slow so the share of the project sales meaning that it's part of the project package the pumps and cyclones is much below the normal level so it's mainly success converting other brands out and replacing those with the Krebs and F.L. Smith brands. So, it's dominated by site sales and conversions.

Congratulations. So, we have been discussing this in the past that you could actually offer these pumps at a rather huge discount and still making a good business case out of it. But if it is growing 10% in the order, it means, I guess, that you are getting a decent price on these pumps and cyclones. Is that a correct assumption?

So typically where you see big discounts on pumps, you see as a part of the capital package. So that if they are part of the big package, sometimes you see discounts there. But typically if you do side sales, you get full price because reason to change out other pump is never commercial, it's always performance. So in that sense there's no price competition at the site level. You see price competition when you are bidding a large package and then pumps as a part of that package. So with the site sales our product margin for pumps is actually at a really good level because it's a technical sale, performance sale, it's not a price sale.

Sounds good. Should we expect this 10%-ish level to continue throughout the year, or is it an easy comp from last year?

We are pushing for year-on-year growth and whether it's 10 or 6 or 7 or 8 we don't know but I think it's a very promising start for the year and of course there's some variability between the quarters but we are confident that we can grow year on year but we don't give exact percentage of our internal targets.

Okay, then my second question is, I guess, to you, Ronan. So, you did 15.1% EBITDA margin within mining Q1. How should we see this level compared to the 13 to 15% 27 guidance range?

Yeah, so, thank you for that, Claus. So, first of all, the 15 is an adjusted number. And as I'm sure you've seen, half a percentage point is carried by a few asset sales and so on. So I think you should look at it as a good quarter. It's an adjusted number. Our reported number for the quarter is 13.7 and maybe half of that is asset sales. So we're pushing towards the long-term range.

I'll leave it at that, Klaus. Sounds great. Fair enough, Roland. Well done in this quarter. I think that was all for me. Thanks.

Thank you. Your next question comes from Tor Fangman from Bank of America. Please go ahead.

Yes, thank you for taking my question, too, from my side. The first one would be your mining peers are more positive on mining equipment demand, strong growth rates here. So my question is, are you losing some market share here, or is this rather due to the changes you made to your portfolio? That would be my first question. I'll come back with another one. Thank you.

We are actually not losing any market share, we are rather increasing the market share. Because we are, as I said, we are focusing on core technology, we don't take third-party content in. And yesterday we announced significant order from India for the iron ore flowsheet. the same customer gave us an order for the largest HBCUs in the world which we flagged before and there we are basically dominating the market and also that 18 vertical mills and now we got the floatation and there's quite a lot of competition for the floatation it seems that our technology was superior there So we don't think that we are losing any market share, we are rather increasing market share in some of the products but there's a big impact that with the last order as an example we left more than 30 percent of volume to the table because we did not want to take third-party content in flowing through our books. And so that was a decision where we are very disciplined about quality of earnings, quality of the order intake. Whenever we can, we always push third-party content out. And then, of course, results that the deal, what was announced yesterday, is 30% smaller than what was on offer. But it was our conscious decision to focus on quality of the earnings, technology and products, not third-party content in signing that agreement.

Very, very well understood. Thank you. My second question would be, so you had a very strong margin now in mining in Q1. So I'm just asking myself, compared to this, the guidance range that you lifted up just looks like a small raise to me. And is this because you expect the revenue patch-up effect that you had in Q1 to cease over the coming quarters and thereby losing some operating leverage? Or are there some other reasons for this? Thank you.

I think that there's a few considerations, right? So first of all, we had a half a percentage point of what we did in Q1 was asset sales. We also had a relatively strong, I think we had 74% revenue from service business, which is not a continued thing. And, you know, secondly, it's relatively early in the year and a lot of turmoil in the world. And, you know, just adjusting upwards has a lot of uncertainty around certain parts of the world. So we found this prudent. This is what we can stand by and what we are confident we can deliver. And that was behind the upward adjustment.

Well understood. Thank you so much.

Thank you. Your next question comes from Lars Topholm from DNB Carnegie. Please go ahead.

Yes, congratulations with the quarterly results. A couple of questions from me. On the gross margin of 35.1% in mining, how should we think about that? Looking ahead.

Yeah, I think we've indicated 32, 34, even up to 35 if the service content is really high. But good average is around 33, which is sustainable. And depending on the mix, if it's really like now high service mix, it can be pushed about 35. But Underline, if we start from the product margin in the company, we don't see big changes in product margin in order intake or revenue. And then if we, of course, manage under absorption and all the other line items, I think around 35 is sustainable throughout the year.

That is very clear, Mikko. Then you have previously commented that in mining to close the margin gap to metal, you need more top line. And now it seems you are close to spinning off the cement business. How should we think about that top line growth, which I guess has to be inorganic? When will we start to see mining to M&A? Will this be one big or many small acquisitions? What words would you put on that?

So if I first focus on organic growth potential, which is more incremental, and I think as Roland said earlier, we're still pushing for the SG&A and efficiencies. We can actually become still much more efficient. So we are not happy with the SG&A level. what we have at the moment. So I think, uh, still continued work on SCNA and, and, uh, and, and efficiency will actually, uh, close the gap quite well. Uh, but, uh, but of course then, then it becomes the volume question. And, and, uh, we actually, then, uh, Boltons, I think we have authority to do from the board and then, uh, bigger acquisitions, then we would, uh, need to debate with the board and come up with a strategic, uh, uh, direction for that one but both zones we still continue to do when those become available but bigger ones I think strategic moves I think yeah so maybe I'm just twisting and turning your words with me Cooper but you sound more comfortable in closing most of that gap from it so organically

than when we spoke six or 12 months ago. Is that just me or is that correct?

I think, Lars, if I can just... So our long-term target is 13 to 15 percent reported beta margin, right? What Metro does is a little bit different. When then... So that's what we stick to, just for the avoidance of doubt. Now, what we're saying is, in order to get potentially better than that as we move forward, we will need to grow. So we will grow better than the market in our service business and we will grow with the market with the current product portfolio as we have now in our products business. Then on top of that we will do bolt-on acquisitions and potentially larger acquisitions if we can get them. That will bring us potentially further than our current long-term targets in 2026.

That's very clear, Roland. Thanks for that. And then a final question. Now you, of course, highlighted you're beginning to look like a quality company. And if I may be cruel here, quality companies have positive cash flows. So can you comment a bit on the bridge to a positive cash flow? But maybe... More interestingly, comment on what the cash flow looks like in mining isolated. I mean, you do an EBITDA of 5.59 before special items. If I add back, let's say, 50 million of your total, 68 million in depreciation, that's an EBITDA of 6.09. I assume most of the working capital change applies to mining isolated. Then you are in round numbers at 180. That's before tax and before APEX, which basically means there's no cash flow left. Is that rough calculation approximately correct? And what moving parts plays in when you look a little bit ahead, where I assume you have an ambition of making a positive free cash flow?

No, no, that's not at all cruel, Lars. You're absolutely right. That's what needs to come. So the way we look at cash flow, Q1 is never a great cash quarter. This was better this year and considerably better than last year. This is the quarter with the bonuses relatively seasonally low and also tax payments and yada yada. But what we're seeing this year, We expect CFFO to be better than last year of 640, but no more than a billion. And then we can all run our numbers on the directional CAPEX, 2% to 3% of revenue we are giving. And then we're also saying that our provisions on especially other provisions needs to come to half over the next two to three years. And when that happens and that will come in lumps, then our free cash flow will be positive and it has to be positive. We agree with that. So that's the type of guidance we give on that for now.

Can you put a word on the network capital rate relative to sales in mining standalone?

Yeah, so most of our balance sheet is mining, and that includes the network and capital. So most of it is mining, and that also means if you want to – we'll give later guidance if and when Cement will leave the company. We'll give – an update on the ratios and so on. But that means you can assume that the current level of working capital will stay, albeit with a lower revenue in mining, of course. I think that's what you are asking for.

On your margin journey and on that growth journey, should the working capital percentage in mining increase?

So, the networking capital, if that stays in nominal terms and revenue become the pure mining revenue, then our ratio will be higher. It won't have a negative cash flow impact, it will be a mathematical change in the ratio and the ratio will be more in line with peers.

That I understand, but then if you look two, three years ahead, will it then stay at the current ratio in mining, or will that ratio increase?

Expectedly, that will be increasing slightly as we become more of a service company.

Okay, that's very clear. Great quarter, guys, really well done. Thanks. Thank you.

Thank you. Your next question comes from Klaus Kells from Necredit. Please go ahead.

Yes, hello. Two questions from my side as well. First of all, just getting back to these margins in mining, and I guess, yeah, we are all pretty impressed. So I can ask perhaps in a slightly different way, have you had perfect mining execution in mining in this quarter or yeah how should we think about that? That would be my first question.

I would say very good execution but far from perfect so I think we still have a room to improve so I wouldn't call it perfect but I think improvement compared to the past and if I look at the margins above our cross profit so that order intake margin for capital and service they are stable year and year and also the revenue product margin top line margin is stable so most of the swing between the kind of 35 what we saw now and then maybe 33 even down to 32 is with a mix so the underlying top line margins are rather stable and of course we are managing then the other line items between product cost and cross profits the best we can so we have full attention but they are quite stable at the moment so there's no big movements in top line profitability meaning product margin okay okay and then also a question related to this pump and cyclone business could you talk a little bit about what kind of size this business has yeah we can't see that in your numbers

And talk a little bit about your global market share and what kind of runway you potentially could have in this business.

So we're not disclosing, you know, separate product areas. But what we're saying on PCV, which is sort of one area for us, is that we are at a market share of around 10%. And that is set to grow. That is our ambition.

Yeah, okay, but you have a market share of around 10%. Okay, then what's the market size?

That's a longer discussion, right? But you have a major market player, which is we are, right? And then you have Metso in there as well, and you have a tail end of players in that market. We're not going to, on this call, give you the specific numbers you're asking for. I'm sorry. That is not disclosable.

Okay, fair enough, fair enough. Last question about this business. Could you just mention whether this margin in this business is above or below your margins for the mining business?

So it's the highest, if you look at the businesses all combined, it's the highest margin business what we have.

Thank you very much. Thank you. Your next question comes from David Farrell from Jefferies. Please go ahead.

Morning, everyone. Congratulations on the results. A couple of questions from me. Firstly, in terms of the mining service revenue growth, you specifically call out effective management of the order book there as driving that. Is that inferring that you've accelerated some service revenue into the first quarter from the second quarter, and therefore that kind of service product mix will swing back quite sharply in the second quarter?

So we actually have not have done any acceleration but if you look at last year we were a little bit falling behind so in the steady market we have a slightly higher order intake than revenue meaning that we slightly fell behind so I think now we are more on top of a kind of a order execution meaning that it should be more steady going forward and so there was no acceleration is that we just fell a little bit behind last year if you look at every quarter order intake and then revenue so it's a bit of kind of catch-up but there's nothing unusual there so we are letting everything to flow through the books and deliveries as they go through so we haven't done any Any extra acceleration, just a better management of backlog and then supply chain?

Thanks for that clarification. And then my second question relates to the cement disposal. Excellent news there. I think people have maybe been a bit concerned, given the macroeconomic backdrop, that that might be kicked down the road. Can you give a bit more detail as to when you moved into exclusivity conversations and whether or not Pacific Avenue have got their financing in place for a transaction? Thanks.

So the information we give here, we're going to limit ourselves to give you that information. We are disclosing the party's name to send the signal that the process is moving forward. And that's what we're going to leave it at. It's a delicate moment of that process. So, you know, whether there will be a transaction or not, we will have to see. But that was the intention with that statement. And we cannot give you the details in that level of detail that you're asking for.

Okay, thank you. I thought it was worth a try.

Fair enough.

Thank you. Your next question comes from Casper Blom from Danske Bank. Please go ahead.

Thank you, and sorry for being silent earlier. I had some technical difficulties. A couple of questions also. Ola, I just wanted to follow up on your comment regarding provisions. You mentioned that other provisions were to roughly half over the next couple of years. Is it still also fair to assume that you'll be spending your restructuring provisions this year?

Yeah, so theoretically a restructuring provision should come to close to zero, it never will, but most of that will be spent this year, yes. The other provisions that we talk about is a bit more unpredictable for us because it's a bucket of stuff from the past that we are solving as we move forward. And, you know, some of that may come soon. Some of it may take some more time. And we'll do it once and be ready to... to solve it and then we will pay it out or release it right so that's how that works that's why it's so hard for us to say whether it'll be one year it'll be five years so on but for the planning purpose you need to assume that we will cut that in half over over three years okay that is that's super clear

Then a second question, maybe a little bit of speculative, but your current headquarters in Valby and the potential sale of that, is there any update on potential timing of that?

No, but we're running the process, so currently BIDOS is showing interest and then we'll see where we go with that. So it is in process and we are set to move from here to the new location beginning of the new year.

Okay, but is it then also the target to have sold it when you're moving?

Yeah, we're not going to give it away, but the intention is that we will sell it and then move. That's the intention.

Okay, very clear. And then just a final one. You mentioned that you would probably get back with more details on the, I would say, targets for mining when you close the sale of cement. a should we expect sort of a separate announcement in connection with also selling cement or will it be more sort of a an update that you give us you know on the following quarter or etc just any kind of flavor as to what to expect in terms of communication on on that

So, I'd like to come back to that and a bit more structure, but I hope if and when we sell the business, we will announce it. And then new targets, long-term targets will only come later on. But directional guidance on working capital and cap expense and so on will come soon thereafter. Okay.

That is super. Thanks a lot.

Thank you. We have a follow-up question from Tor Fangman from Bank of America. Please go ahead.

Thank you. Thank you once again for taking my follow-up question. Just one very quick clarification. So it's understood in a way that the 15.1% margin in mining was supported by 50 base points coming from an asset sale. Could you just clarify this? And then one question, why did you not adjust for this? Thank you.

Yeah, so in the P&L, we have a line called other income. And that's when we do bits and pieces. And there's been a few smaller asset sales that add up to about half a percentage point, 50 basis point. Yes, that's right, for the quarter.

But you did not adjust for this downward. So it should be basically, if we would adjust for this, we would have been at 14.6% basically.

That's right, yes.

Okay, thank you.

Thank you. This concludes our question and ends the session. I would now like to turn the conference back over to the company for any closing remarks.

Thanks very much for the questions. And if I summarize the quote, it has been a good quote for us. And as we discussed earlier, we are moving in the territory of becoming quality company, high quality order intake, high quality revenues. Our SG&A is going down and we are pushing for the efficiency. And we are happy with the portfolio that we have. We have a leading technology for all of the key flow sheets in mining. copper, gold, iron ore now we are building in India so very pleased with the quarter and we have a high level of confidence for full year despite the geopolitics and uncertainty and for that reason we increased the guidance and thanks very much for your time and look forward talking to you soon again.