FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S...

FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm

2004

Presentation of FLS Industries

Jørgen Huno Rasmussen, CEO FLS Industries A/S

Carnegie Small Cap Seminar, Stockholm 14 September 2004


FLS Industries A/S

MissionProvider of machinery, equipment, systems and services

including complete production lines and plants for the global cement and minerals industries

Cement MineralsTechnologyConcept


Facts and Figures about FLS Industries 2004

■ Expected turnover 2004: DKK 14bn (EUR 1.9bn)

■ Expected EBIT 2004: DKK 3-400m (EUR 40-55m)

■ Employees: 7,300

■ Equity: DKK 2.8bn (EUR 400m)

■ Market Cap: DKK 4.0bn (EUR 550m)

■ Balance sheet: Positive net financial assets at year end


Back to Core Business

■ 1882 F.L.Smidth foundedDelivery of machinery to

production of cement

■ 1884 Aalborg Portland establishedProduction of cement

■ 20th Century Global cement group

■ End of 20th Century ConglomerateDelivery of machinery and –plants to production of cement, building materials, aircraft maintenance, environment, packaging, transportation, etc.

■ Beginning of 21st Century Focus on core competencesGlobal provider of machinery, equipment, systems and services including complete production lines and plants for the global cement and minerals industries


Structural changes in recent years

BEFORE NOW

Decentralized Centralized

Conglomerate Focus on engineering and solutions to cement and minerals industries only

Family dominated Boards Professional Boards

Technology oriented organisation Project oriented organisation


FLS Industries Business Units

FLS Industries

Continuing Activities Other activities

F.L.Smidth

F.L.Smidth Airtech

F.L.Smidth Automation

F.L.Smidth Materials Handling

FFE Minerals

Pfister

Ventomatic

MAAG Gear

Dansk Eternit Holding

Densit

FLS miljø

Aalborg Portland

Unicon

SOLD

SOLD

WIND UP



FLS Industries

Continuing Activities

F.L.Smidth



F.L.Smidth Airtech

FFE Minerals

Pfister

Ventomatic

MAAG Gear

F.L.Smidth supplies complete plants, equipment, single machine units, spare parts, know-how, services and maintenance to the cement industry world-wide



FLS Industries


F.L.Smidth



F.L.Smidth Airtech

FFE Minerals

Pfister

Ventomatic

MAAG Gear

FFE Minerals is a worldwide supplier of machinery, operating and maintenance services to the metallic mining and mineral industries as well as to the lime and paper industries



FLS Industries


F.L.Smidth



F.L.Smidth Airtech

FFE Minerals

MAAG Gear

Pfister

Ventomatic

Pfister is one of the world’s leading suppliers of dosing equipment to the cement industry and related industries



FLS Industries


F.L.Smidth



F.L.Smidth Airtech

FFE Minerals

MAAG Gear

Pfister

Ventomatic

Ventomatic is one of the world’s leading suppliers of complete packing lines to the cement industry and related industries



FLS Industries


F.L.Smidth



F.L.Smidth Airtech

FFE Minerals

MAAG Gear

Pfister

Ventomatic

MAAG Gear is an international supplier of gears and gear units to the cement industry and related industries


Project Centre Production Sales Office

The World excl. Europe

Geographical presence


Project Centre Production Sales Office

Europe

Geografical presence


F.L.Smidth – Competences and competitive position

Rawmills Burners Cement mills Kilns Coolers

Key machinary to production of cement

F.L.Smidth no. 1 globally within all segments with a 40-60% market share

Design and production of complete cement production lines and plants

F.L.Smidth no. 1 globally

With a 50-60% market share


3C em entsilo

Cem entsilo Cem ent

silo

Cem ent m ill

Separator

Roller pressG ear unit

C linkerS ilo

2 Packers

Ship loading

Ship unloading

Lim estone C lay Sand Iron

1 2 3 4

12

34

Storage

C rusher

Ana lyzer

Filte r Filter

R aw m eals ilo

R aw m ill

C oal m ill

Cement Plant – Flow chart


Financial, legal and commercial conditions

Performance warranties & conditions

Logistic information

Sales price

Cost price estimates

Equipment list

Flow sheet, Proposal drawings

Proces designEnquiryTender Documents

Technical specifications

Contract draft

QuotationNegotiationsModifications

Contractaward

Approximately 3 months. 3 – 9 months

From tender to contract


Process designOrder list

Manufacturing/Documentation

General ArrangementDrawings/specifications

Contract

Procurement

Inspection and expedition

Shipping docs. and dispatch

Supervision of erection

Commissioning

Accounting / Invoicing

Planning / Logistics

Project management

1st year 2nd year 3rd year

From contract to completion


Major contracts under implementation

Major contracts under implementationMajor contracts under implementation

Pennsuco

Cessa

Kirène

Ewekoro

Dudfield

Padeswood

Buxton

M´silaGabès

AUCC

QenaConch

HaiphongTam Diep

Berrima

Golden Bay

Khyber

Rohoznik

Bushehr

Saveh White

Civil & Marine

Obajana

Yunnan

Surma

Faraz

21 January 2004


Research and Development

Recent invention; HOTDISC

Handling of alternative fuels without a prior reduction in size

Integral part of the kiln system => both combustion gasses and residual products are used in the production process

Types of alternative fuels Car and truck tyres, wood waste, paper sludge, municipal waste, etc.

R&D focus areas Environmental protection (CO2, NOx and other emissions, etc.)

Reduced production costs (Energy consumption, productivity, etc.)

Top priority: Reduced use of fossil fuels


Global cement consumption

0200400600800

100012001400160018002000

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Million tonnes

-6%

-4%

-2%

0%

2%

4%

6%

8%GrowthAverage growth 3.5%


Contracted cement kiln capacity on a yearly basis 1980-2003

0

10

20

30

40

50

60

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Million tonnes

New cement kiln capacity

Average 1980 – 2003; 24m tonnes per year

Excl. China


Demand for new cement kiln capacity

New cement kiln capacity contracted in 2003; ~ 25m tonnes on a yearly basis (on a par with the average of the past 25 years)

Demand for new capacity supported by steady growth in global cement consumption

Annual growth in global cement consumption 3%Annual growth in world population; 70m citizens

Average cement consumption per capita (p.t. 275 kg) – increasing over time

Replacement and modernisation of old cement plants Estimated installed capacity worldwide; 1.8bn tonnes per year

If lifetime of cement plant 100 years => 1% of capacity (18m tonnes) replaced p.a.


Market for extraction of minerals

FFE Minerals - a niche player in the market for extraction of minerals which is five to nine times as large as the cement market

Growing demand for minerals in Asia, in particular China

Increasing raw material prices and investments among producers

Gold, Copper, Platinum PricesIndex 01-jan-2003 = 100

(as qouted on the London Metal Exchange)

70

80

90

100

110

120

130

140

150

160

170

180

190

200

210

220

01

-ja

n-0

3

01

-fe

b-0

3

01

-ma

r-0

3

01

-ap

r-0

3

01

-ma

j-0

3

01

-ju

n-0

3

01

-ju

l-0

3

01

-au

g-0

3

01

-se

p-0

3

01

-ok

t-0

3

01

-no

v-0

3

01

-de

c-0

3

01

-ja

n-0

4

01

-fe

b-0

4

01

-ma

r-0

4

01

-ap

r-0

4

01

-ma

j-0

4

01

-ju

n-0

4

01

-ju

l-0

4

01

-au

g-0

4

Ind

ex

(0

1-j

an

-20

03

= 1

00

)

Index Gold

Index Copper

Index Platinum


FFE Minerals – Product Range

Products & Services

Provider of processes and systems which include primary crushing plants, milling systems, and wet or dry classification systems for all minerals, including iron, gold, copper, nickel, lead, zinc and coal.

Provider of total pyrometallurgical solutions from R&D through to erection and commissioning for alumina and bauxite, lime, pulp and paper and the metalliferous industries.

Provider of total service, maintenance, asset management and operational services to the minerals and metalliferous industries.


Minerals Product Spectrum & Competitive position

MATERIALS HANDLING PROCESSING PYRO

COLD BUSINESS SEGMENT HOT BUSINESS SEGMENT

crushers conveyors feeders mills cyclones floatation pumps dewatering rotary fluid bed suspension

FFE MineralsNo. 1-2

FFE MineralsNo. 1-2

FFE MineralsNo. 1-2New business

segment

FFE Minerals – a niche player

Heritage brand namesStaff with good minerals industry experiencePresence in local marketsTechnical edge for large scale equipment

Consolidation in the industry

Merger of Nordberg & Svedala to form Metso MineralsAcquisition of Nordberg grinding business and Luigi Metallurgie by Outokumpu Acquisition of Alstrom Machinery by AndritzMerger of Dorr-Oliver & Eimco


FFE Minerals – Future Growth

FFE Minerals will grow through:

Continued focus on growth in spare parts and services segment Integration of new technology and increased product portfolio Leveraging the materials handling capabilities of F.L.Smidth into

the minerals processing market Strategic alliances with peer partners to strengthen FFE Minerals’

position Acquisition of bolt-on technologies Research and development


Same technology to two different industries

Calcination

GrindingMaterials Handling

Preheating

CoolingMaintenanceTraining Ex. SF Cross Bar

Ex. ATOX mills

Ex. Gas suspension calciners

Ex. Burners

Automation

Air pollution control

CEMENT MINERALS


Current Market Developments

Cement Positive trends in demand for new kiln capacity

continue; 30m tpy new kiln capacity contracted in 2004 so far Temporary slowdown in Chinese market Increased level of activity in Vietnam, India, Pakistan,

Middle East and USA

Minerals Positive trend in demand for new capacity continues,

although at a slower pace than anticipated High energy and steel prices as well as possible royalty

on mined ore has temporarily postponed investment decisions

Geographically, India remains a very active market


How to reach the 5% EBT-target

Focus areas:

Sales policies

Risk control

Contract administration

Project orientation

Standardisation

Sourcing from India & China

Integrated geographical presence

Aftermarket services

Research & product-development

IT-development

Synergies in Cement / Minerals

Expansion within Minerals

A more detailed strategic plan for the improvement of profitability to be concluded by the end of 2004


Why invest in FLS Industries ?

A focused company

with a unique global market position

supported by steady growth in global cement consumption

aiming for a 5% EBT ratio

FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S...

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