Investor Presentation_Carnegie

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					2004

            Presentation of FLS Industries

           Jørgen Huno Rasmussen, CEO FLS Industries A/S




Carnegie Small Cap Seminar, Stockholm 14 September 2004
         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004   FLS Industries A/S
                                                             FLS Industries A/S
           FLS Industries A/S




                                     Mission
                Provider of machinery, equipment, systems and services
                     including complete production lines and plants
                      for the global cement and minerals industries




                   Cement                             Minerals
                                       Technology
                                       Concept




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004          FLS Industries A/S
                                                                    FLS Industries A/S
           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




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004          FLS Industries A/S
                                                                    FLS Industries A/S
           Back to Core Business

  ■ 1882                                F.L.Smidth founded
                                        Delivery of machinery to
                                        production of cement
  ■ 1884                                Aalborg Portland established
                                        Production of cement


  ■ 20th Century                        Global cement group


  ■ End of 20th Century                 Conglomerate
                                        Delivery of machinery and –plants to
                                        production of cement, building materials,
                                        aircraft maintenance, environment,
                                        packaging, transportation, etc.
  ■ Beginning of 21st Century           Focus on core competences
                                        Global provider of machinery, equipment,
                                        systems and services including complete
                                        production lines and plants for the global
                                        cement and minerals industries

         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004               FLS Industries A/S
                                                                         FLS Industries A/S
            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




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004           FLS Industries A/S
                                                                     FLS Industries A/S
           FLS Industries Business Units


                                    FLS Industries
         Continuing Activities                            Other activities

         F.L.Smidth                              Dansk Eternit Holding

          F.L.Smidth Automation                  Densit

          F.L.Smidth Materials Handling          FLS miljø               WIND UP

          F.L.Smidth Airtech                     Aalborg Portland            SOLD

         FFE Minerals                            Unicon                      SOLD

         Pfister

         Ventomatic

         MAAG Gear


         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004                FLS Industries A/S
                                                                          FLS Industries A/S
           FLS Industries Business Units


                                    FLS Industries
         Continuing Activities
                                                  F.L.Smidth supplies complete
         F.L.Smidth                               plants, equipment, single
                                                  machine units, spare parts,
          F.L.Smidth Automation                   know-how, services and
                                                  maintenance to the cement
          F.L.Smidth Materials Handling           industry world-wide
          F.L.Smidth Airtech

         FFE Minerals

         Pfister

         Ventomatic

         MAAG Gear

         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004          FLS Industries A/S
                                                                    FLS Industries A/S
           FLS Industries Business Units


                                    FLS Industries
         Continuing Activities
                                                  FFE Minerals is a worldwide
         F.L.Smidth                               supplier of machinery, operating
                                                  and maintenance services to
          F.L.Smidth Automation                   the metallic mining and mineral
                                                  industries as well as to the lime
          F.L.Smidth Materials Handling           and paper industries
          F.L.Smidth Airtech

         FFE Minerals

         Pfister

         Ventomatic

         MAAG Gear

         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004            FLS Industries A/S
                                                                      FLS Industries A/S
           FLS Industries Business Units


                                    FLS Industries
         Continuing Activities
                                                  Pfister is one of the world’s
         F.L.Smidth                               leading suppliers of dosing
                                                  equipment to the cement
          F.L.Smidth Automation                   industry and related industries

          F.L.Smidth Materials Handling

          F.L.Smidth Airtech

         FFE Minerals

         Pfister

         Ventomatic

         MAAG Gear

         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004            FLS Industries A/S
                                                                      FLS Industries A/S
           FLS Industries Business Units


                                    FLS Industries
         Continuing Activities
                                                  Ventomatic is one of the world’s
         F.L.Smidth                               leading suppliers of complete
                                                  packing lines to the cement
          F.L.Smidth Automation                   industry and related industries

          F.L.Smidth Materials Handling

          F.L.Smidth Airtech

         FFE Minerals

         Pfister

         Ventomatic

         MAAG Gear

         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004           FLS Industries A/S
                                                                     FLS Industries A/S
           FLS Industries Business Units


                                    FLS Industries
         Continuing Activities
                                                  MAAG Gear is an international
         F.L.Smidth                               supplier of gears and gear units
                                                  to the cement industry and
          F.L.Smidth Automation                   related industries

          F.L.Smidth Materials Handling

          F.L.Smidth Airtech

         FFE Minerals

         Pfister

         Ventomatic

         MAAG Gear

         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004            FLS Industries A/S
                                                                      FLS Industries A/S
           Geographical presence

  Project Centre          Production               Sales Office


                      The World
                       excl. Europe




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004         FLS Industries A/S
                                                                   FLS Industries A/S
            Geografical presence

 Project Centre    Production         Sales Office




  Europe




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004   FLS Industries A/S
                                                             FLS Industries A/S
           F.L.Smidth – Competences and competitive position



 Design and production of complete cement production lines and plants

    F.L.Smidth no. 1 globally
    With a 50-60% market share




 Key machinary to production of cement

     Rawmills          Burners         Kilns          Coolers          Cement mills



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




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004             FLS Industries A/S
                                                                       FLS Industries A/S
                             Cement Plant – Flow chart


                                                                                               Filter                              Filter
                                                                      Crusher
                                                                                                                    Analyzer
                 Limestone               Clay         Sand                Iron

                                1                2              3                4                           Raw meal
                                                                                                             silo
                                                                                     Storage
                                                                                                                                            Coal mill


                                                            1
                                                      2
                                                4 3
                                                                                               Raw mill




                 Clinker
                 Silo




                             Separator


                                                                                                          Packers
  2    3
                                                                Cement       Cement
                                                                silo         silo
                                                                                                                                                                           Cement
                                                                                                                                                                           silo


                              Cement mill
                                                          Gear unit                                                                                       Ship unloading
  Roller press
                                                                                                                    Ship loading




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004                                                                                               FLS Industries A/S
                                                                                                                                                         FLS Industries A/S
             From tender to contract

                             Approximately 3 months.                          3 – 9 months
                                                                           Negotiations    Contract
                                                               Quotation
                                                                           Modifications   award

                                       Contract draft

               Financial, legal and commercial conditions

                      Performance warranties & conditions

                       Logistic information

                       Technical specifications

                                                      Sales price

                       Cost price estimates

                  Equipment list

               Flow sheet, Proposal drawings

Enquiry
Tender       Proces design
Documents

           Carnegie Small Cap Seminar September 2004
  Carnegie Small Cap Seminar, Stockholm 1414 September 2004                       FLS Industries A/S
                                                                                   FLS Industries A/S
           From contract to completion

                        Project management

                        Planning / Logistics

                        Accounting / Invoicing

                                                                      Commissioning

                                                            Supervision of erection

                                               Shipping docs. and dispatch

                                          Inspection and expedition

                                       Procurement

                          Manufacturing/Documentation

                       General Arrangement
                       Drawings/specifications
        Contract      Process design
                      Order list
                            1st year                 2nd year                3rd year

         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004                          FLS Industries A/S
                                                                                    FLS Industries A/S
           Major contracts under implementation




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004   FLS Industries A/S
                                                             FLS Industries A/S
             Research and Development

  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


 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.



         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004                        FLS Industries A/S
                                                                                  FLS Industries A/S
           Global cement consumption


          Million tonnes                                   Average growth 3.5%                                                           Growth
         2000                                                                                                                              8%
         1800
                                                                                                                                              6%
         1600
         1400                                                                                                                                 4%
         1200                                                                                                                                 2%
         1000
          800                                                                                                                                 0%
          600                                                                                                                                 -2%
          400
                                                                                                                                              -4%
          200
             0                                                                                                                                -6%
                1984
                       1985
                              1986
                                     1987
                                            1988
                                                   1989
                                                          1990
                                                          1991
                                                                 1992
                                                                        1993
                                                                               1994
                                                                                      1995
                                                                                             1996
                                                                                             1997
                                                                                                    1998
                                                                                                           1999
                                                                                                                  2000
                                                                                                                         2001
                                                                                                                                2002
                                                                                                                                       2003
         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004                                                                       FLS Industries A/S
                                                                                                                                 FLS Industries A/S
                New cement kiln capacity


                Contracted cement kiln capacity on a yearly basis 1980-2003
  Million tonnes
    60

    50
                Average 1980 – 2003; 24m tonnes per year
    40

    30

    20

    10

     0
         1980
                 1981
                        1982
                               1983
                                      1984
                                             1985
                                                    1986
                                                           1987
                                                                  1988
                                                                         1989
                                                                                1990
                                                                                       1991
                                                                                              1992
                                                                                                     1993
                                                                                                            1994
                                                                                                                   1995
                                                                                                                          1996
                                                                                                                                 1997
                                                                                                                                        1998
                                                                                                                                               1999
                                                                                                                                                      2000
                                                                                                                                                             2001
                                                                                                                                                                    2002
                                                                                                                                                                           2003
                                                                                                                                                      Excl. China




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004                                                                                      FLS Industries A/S
                                                                                                                                                FLS Industries A/S
            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.




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004               FLS Industries A/S
                                                                         FLS Industries A/S
           Market for extraction of minerals

                                                                                                                    Gold, Copper, Platinum Prices
                                                                                                                                      Index 01-jan-2003 = 100
                                                                                                          (as qouted on the London Metal Exchange)

        FFE Minerals - a niche
         player in the market for                                         220

         extraction of minerals which                                     210

         is five to nine times as large                                   200

                                                                          190
         as the cement market
                                                                          180

                                                                          170




                                              Index (01-jan-2003 = 100)
        Growing demand for                                               160

         minerals in Asia, in                                             150

         particular China                                                 140

                                                                          130

                                                                          120
        Increasing raw material                                          110

         prices and investments                                           100
                                                                                                                                                                                                                                                         Index Gold
         among producers                                                  90
                                                                                                                                                                                                                                                         Index Copper
                                                                          80
                                                                                                                                                                                                                                                         Index Platinum
                                                                          70
                                                                                                        01-mar-03


                                                                                                                                01-maj-03




                                                                                                                                                                    01-aug-03


                                                                                                                                                                                            01-okt-03




                                                                                                                                                                                                                                                        01-mar-04


                                                                                                                                                                                                                                                                                01-maj-04




                                                                                                                                                                                                                                                                                                                    01-aug-04
                                                                                01-jan-03
                                                                                            01-feb-03


                                                                                                                    01-apr-03


                                                                                                                                            01-jun-03
                                                                                                                                                        01-jul-03


                                                                                                                                                                                01-sep-03


                                                                                                                                                                                                        01-nov-03
                                                                                                                                                                                                                    01-dec-03
                                                                                                                                                                                                                                01-jan-04
                                                                                                                                                                                                                                            01-feb-04


                                                                                                                                                                                                                                                                    01-apr-04


                                                                                                                                                                                                                                                                                            01-jun-04
                                                                                                                                                                                                                                                                                                        01-jul-04
         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004                                                                                                                                                      FLS Industries A/S
                                                                                                                                                                                                                FLS Industries A/S
           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.




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004           FLS Industries A/S
                                                                     FLS Industries A/S
              Minerals Product Spectrum & Competitive position


     COLD BUSINESS SEGMENT                                                    HOT BUSINESS SEGMENT

     MATERIALS HANDLING                        PROCESSING                             PYRO

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



FFE Minerals                    FFE Minerals                                FFE Minerals
No. 1-2                         No. 1-2            New business             No. 1-2
                                                     segment




FFE Minerals – a niche player                         Consolidation in the industry
                                                      Merger of Nordberg & Svedala to form Metso
Heritage brand names                                  Minerals
Staff with good minerals industry experience          Acquisition of Nordberg grinding business and
Presence in local markets                             Luigi Metallurgie by Outokumpu
Technical edge for large scale equipment              Acquisition of Alstrom Machinery by Andritz
                                                      Merger of Dorr-Oliver & Eimco

          Carnegie Small Cap Seminar September 2004
 Carnegie Small Cap Seminar, Stockholm 1414 September 2004                           FLS Industries A/S
                                                                                      FLS Industries A/S
           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




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004          FLS Industries A/S
                                                                    FLS Industries A/S
            Same technology to two different industries

                        CEMENT                   MINERALS


      Grinding                                  Automation
       Ex. ATOX mills
                                                       Materials Handling
                                                              Air pollution control
                   Preheating
                         Ex. Burners



                                       Calcination
                                       Ex. Gas suspension calciners



     Maintenance                                            Cooling
            Training                                            Ex. SF Cross Bar




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004                          FLS Industries A/S
                                                                                    FLS Industries A/S
           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


         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004             FLS Industries A/S
                                                                       FLS Industries A/S
            How to reach the 5% EBT-target

Focus areas:                            A more detailed strategic
                                        plan for the improvement of
Sales policies                         profitability to be concluded
Risk control                           by the end of 2004
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
         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004     FLS Industries A/S
                                                               FLS Industries A/S
            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




         Carnegie Small Cap Seminar September 2004
Carnegie Small Cap Seminar, Stockholm 1414 September 2004   FLS Industries A/S
                                                             FLS Industries A/S

				
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