FLSmidth Launches DKK 1.4 Billion Share Buy-Back Initiative

FLSmidth Announces a Strategic Share Buy-Back Initiative

FLSmidth & Co. A/S has unveiled an ambitious share buy-back initiative valued at DKK 1.4 billion. This initiative marks a pivotal step for the company, being its first since 2012 and aims to enhance shareholder value while maintaining a balanced approach to investing in growth opportunities.

Goals of the Share Buy-Back Programme

The primary objective of this share buy-back programme is to adjust the capital structure of FLSmidth following a significant improvement in the company’s financial performance. With a strategic focus on portfolio optimisation, FLSmidth has reduced its exposure to volatile projects while bolstering its order backlog with higher-margin technological services.

The Board of Directors has expressed that this decision aligns with their commitment to returning value to shareholders, while still pursuing future growth opportunities. Enhanced financial stability supports this initiative, allowing FLSmidth to return capital effectively without compromising its long-term goals.

Strategic Context

FLSmidth’s decision is underpinned by recent divestments including the Cement business and corporate headquarters. These strategic choices have cleared the way for a more resilient operational focus, positioning the company to leverage higher-margin offerings and fostering financial robustness.

Implementation of the Buy-Back Programme

Initiated under the authorization from the Annual General Meeting, this programme will enable FLSmidth to purchase up to 10% of its share capital. Notably, the maximum allowable amount for the buying back of shares will adhere to the terms outlined by Nasdaq Copenhagen, ensuring that prices remain close to market values during acquisitions.

Starting from June 25, this buy-back is set to conclude by March 20 of the following year. FLSmidth anticipates acquiring a maximum of 4.6 million shares, representing around 8 percent of its share capital, all while adhering to safe trading practices to ensure transparency and compliance.

Trading Regulations and Regulations Compliance

The proposed buy-back will be executed in accordance with strict regulations to prevent market abuse, as dictated by the European Parliament. In every seventh trading day, the company commits to issuing an announcement regarding the transactions made under this buy-back programme, ensuring that stakeholders are kept informed.

Engaging a Third Party for Management

To maintain objectivity in the execution of the buy-back, FLSmidth has appointed BNP Paribas as the managing entity for this programme. This arrangement allows all trading decisions to be made independently, ensuring that the programme operates free from any internal biases.

Expected Outcomes

The execution of this share buy-back programme is not merely a financial maneuver; it represents FLSmidth’s commitment to providing ongoing value to its investors. By strengthening its capital structure and demonstrating financial prudence, FLSmidth sets a solid foundation for future growth and sustainability in the mining sector.

Frequently Asked Questions

What is the purpose of FLSmidth's share buy-back programme?

The programme aims to adjust the capital structure of FLSmidth while returning value to shareholders and supporting future growth opportunities.

When does the share buy-back programme begin and end?

The buy-back programme commences on June 25 and will run until no later than March 20 of the following year.

Who is managing the share buy-back programme?

BNP Paribas has been appointed to manage the programme, making trading decisions independently to ensure objectivity.

How many shares does FLSmidth plan to repurchase?

FLSmidth plans to repurchase up to 4.6 million shares, accounting for about 8 percent of its total share capital.

How does this buy-back programme align with FLSmidth’s long-term goals?

It balances returning value to shareholders while still pursuing growth through strategic investments, reflecting FLSmidth's commitment to sustainable business practices.

About The Author

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