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

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Presentation on theme: "FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm 2004."— Presentation transcript:

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

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

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

4 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm 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 CenturyFocus on core competences Global provider of machinery, equipment, systems and services including complete production lines and plants for the global cement and minerals industries

5 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Structural changes in recent years BEFORENOW DecentralizedCentralized ConglomerateFocus on engineering and solutions to cement and minerals industries only Family dominated BoardsProfessional Boards Technology oriented organisationProject oriented organisation

6 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm 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 WIND UP

7 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm FLS Industries Business Units FLS Industries Continuing Activities F.L.Smidth F.L.Smidth Automation F.L.Smidth Materials Handling 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

8 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm FLS Industries Business Units FLS Industries Continuing Activities F.L.Smidth F.L.Smidth Automation F.L.Smidth Materials Handling 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

9 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm FLS Industries Business Units FLS Industries Continuing Activities F.L.Smidth F.L.Smidth Automation F.L.Smidth Materials Handling F.L.Smidth Airtech FFE Minerals MAAG Gear Pfister Ventomatic Pfister is one of the worlds leading suppliers of dosing equipment to the cement industry and related industries

10 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm FLS Industries Business Units FLS Industries Continuing Activities F.L.Smidth F.L.Smidth Automation F.L.Smidth Materials Handling F.L.Smidth Airtech FFE Minerals MAAG Gear Pfister Ventomatic Ventomatic is one of the worlds leading suppliers of complete packing lines to the cement industry and related industries

11 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm FLS Industries Business Units FLS Industries Continuing Activities F.L.Smidth F.L.Smidth Automation F.L.Smidth Materials Handling 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

12 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Project CentreProduction Sales Office The World excl. Europe Geographical presence

13 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Project CentreProductionSales Office Europe Geografical presence

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

15 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Cement Plant – Flow chart

16 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Financial, legal and commercial conditions Performance warranties & conditions Logistic information Sales price Cost price estimates Equipment list Flow sheet, Proposal drawings Proces design Enquiry Tender Documents Technical specifications Contract draft Quotation Negotiations Modifications Contract award Approximately 3 months. 3 – 9 months From tender to contract

17 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Process design Order list Manufacturing/Documentation General Arrangement Drawings/specifications Contract Procurement Inspection and expedition Shipping docs. and dispatch Supervision of erection Commissioning Accounting / Invoicing Planning / Logistics Project management 1st year2nd year3rd year From contract to completion

18 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Major contracts under implementation

19 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm 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 (CO 2, NOx and other emissions, etc.) Reduced production costs (Energy consumption, productivity, etc.) Top priority: Reduced use of fossil fuels

20 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Global cement consumption Average growth 3.5%

21 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm New cement kiln capacity Average 1980 – 2003; 24m tonnes per year Excl. China

22 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Demand for new cement kiln capacity nNew cement kiln capacity contracted in 2003; ~ 25m tonnes on a yearly basis (on a par with the average of the past 25 years) nDemand for new capacity supported by steady growth in global cement consumption n 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 nReplacement and modernisation of old cement plants n Estimated installed capacity worldwide; 1.8bn tonnes per year n If lifetime of cement plant 100 years => 1% of capacity (18m tonnes) replaced p.a.

23 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Market for extraction of minerals nFFE Minerals - a niche player in the market for extraction of minerals which is five to nine times as large as the cement market nGrowing demand for minerals in Asia, in particular China nIncreasing raw material prices and investments among producers

24 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm FFE Minerals – Product Range Products & Services nProvider 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. nProvider of total pyrometallurgical solutions from R&D through to erection and commissioning for alumina and bauxite, lime, pulp and paper and the metalliferous industries. nProvider of total service, maintenance, asset management and operational services to the minerals and metalliferous industries.

25 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Minerals Product Spectrum & Competitive position MATERIALS HANDLINGPROCESSINGPYRO COLD BUSINESS SEGMENT HOT BUSINESS SEGMENT crushersconveyorsfeedersmillscyclonesfloatationpumpsdewateringrotaryfluid bedsuspension FFE Minerals No. 1-2 New business segment FFE Minerals – a niche player Heritage brand names Staff with good minerals industry experience Presence in local markets Technical edge for large scale equipment Consolidation in the industry Merger of Nordberg & Svedala to form Metso Minerals Acquisition of Nordberg grinding business and Luigi Metallurgie by Outokumpu Acquisition of Alstrom Machinery by Andritz Merger of Dorr-Oliver & Eimco

26 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm FFE Minerals – Future Growth FFE Minerals will grow through: nContinued focus on growth in spare parts and services segment nIntegration of new technology and increased product portfolio nLeveraging the materials handling capabilities of F.L.Smidth into the minerals processing market nStrategic alliances with peer partners to strengthen FFE Minerals position nAcquisition of bolt-on technologies nResearch and development

27 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Same technology to two different industries Calcination Grinding Materials Handling Preheating Cooling Maintenance Training Ex. SF Cross Bar Ex. ATOX mills Ex. Gas suspension calciners Ex. Burners Automation Air pollution control CEMENT MINERALS

28 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Current Market Developments Cement nPositive trends in demand for new kiln capacity continue; 30m tpy new kiln capacity contracted in 2004 so far nTemporary slowdown in Chinese market nIncreased level of activity in Vietnam, India, Pakistan, Middle East and USA Minerals nPositive trend in demand for new capacity continues, although at a slower pace than anticipated nHigh energy and steel prices as well as possible royalty on mined ore has temporarily postponed investment decisions nGeographically, India remains a very active market

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

30 FLS Industries A/S Carnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/S Carnegie Small Cap Seminar 14 September 2004 Stockholm Why invest in FLS Industries ? A focused company nwith a unique global market position nsupported by steady growth in global cement consumption naiming for a 5% EBT ratio


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