1. FLS Industries A/S Annual Accounts 2002 2002 Annual Report 2002

2. FLS Industries A/S Annual Accounts 2002 Agenda Main conclusions Annual Accounts Core activities –F.L.Smidth Group –FLS Building Materials Non-strategic activities –FLS Aerospace –FLS miljø –Other Prospects for 2003 Conclusion Questions

3. FLS Industries A/S Annual Accounts 2002 Main conclusions FLS Group Turnover DKK 16,444m (DKK 18,930m in 2001). Earnings before interest and tax (EBIT) DKK –647m (DKK 195m in 2001) – on a par with expectations. Earnings before tax (EBT) DKK –1,347m (DKK –12m in 2001) – on a par with expectations. Net interest-bearing debt DKK 2,953m (DKK 4,990m in 2001). Cash flows from operating activities DKK 714m (DKK 345m in 2001 adjusted for NKT dividend).

4. FLS Industries A/S Annual Accounts 2002 Financial highlights for Group DKKm Turn.EBITEBT F.L.Smidth Group7,217105103 FLS Building Materials4,899318368 FLS miljø1,392(659)(779) FLS Aerospace2,730(202)(289) Other206(209)(750) Total16,444(647)(1,347) Financial highlights for the activities of the Group

5. FLS Industries A/S Annual Accounts 2002 Focusing DKKbn20012002 Unicon activities0.6 NKT shares0.6 Other0.2 RMIG and Unicon paving stone products0.5 Total0.51.4 Disposal of non-strategic activities

6. FLS Industries A/S Annual Accounts 2002 Cash flows DKKm 20012002 Operating activities 345*714 Operating investments (1,016)(701) Net from operations (671)13 Cash flows *Adjusted for NKT Holding dividend in 2001

7. FLS Industries A/S Annual Accounts 2002 Balance sheet DKKm 20012002 Total assets 18,82815,636 Shareholders’ equity 6,8695,729 Net interest-bearing debt 4,9902,953 Solvency ratio 36%37% Balance sheet

8. FLS Industries A/S Annual Accounts 2002 Main conclusions Order intake higher than anticipated Net turnover lower than last year and lower than anticipated EBIT and EBT on a par with 3rd quarter estimate Highly improved cash flows from operating activities Order backlog increased DKK 1.1bn to DKK 7.6bn Significant orders in Algeria, South Africa, China, Libya, USA and UK Sales of services and spare parts fell in 2002 Market for new kiln capacity still under pressure F.L.Smidth Group Annual Accounts 2002

9. FLS Industries A/S Annual Accounts 2002 Financial highlights F.L.Smidth Gruppen Annual Accounts 2002 F.L.Smidth Group DKKm 20012002 Net turnover7,9827,217 EBITDA352250 Earnings before interest and tax (EBIT)194105 Earnings before tax (EBT)219103 Cash flows from operating activities(384)234 Cash flows from operating and investing activ.(541)165 Net interest-bearing debt (balances)(66)(534)

10. FLS Industries A/S Annual Accounts 2002 Global cement consumption F.L.Smidth Group Annual Accounts 2002 F.L.Smidth Group

11. FLS Industries A/S Annual Accounts 2002 Yearly contracted cement kiln capacity F.L.Smidth Group Annual Accounts 2002 F.L.Smidth Group *exclusive of China

12. FLS Industries A/S Annual Accounts 2002 Order intake 1991-2002 F.L.Smidth Group Annual Accounts 2002 F.L.Smidth Group

13. FLS Industries A/S Annual Accounts 2002 Order backlog in sales prices F.L.Smidth Group Annual Accounts 2002 F.L.Smidth Group

14. FLS Industries A/S Annual Accounts 2002 Geographical distribution of orders F.L.Smidth Group Annual accounts 2002 F.L.Smidth Group

15. FLS Industries A/S Annual Accounts 2002 Prospects F.L.Smidth Group Annual Accounts 2002 F.L.Smidth Group Total order backlog DKK 7,619m Majority to be processed in 2003-2004 Same level of activity in 2003 as in 2002 Earnings before tax (EBT) expected to be slightly above 2002 At the end of the year projects in progress were, as a whole, in accordance with the latest plans and budgets

16. FLS Industries A/S Annual Accounts 2002 Main conclusions FLS Building Materials Annual Accounts 2002 EBIT DKK 318m, better than 2001 (DKK 294m) as expected EBIT from core activities DKK 334m (DKK 324m) Market share generally maintained Investments kept at a low level Undertakings and activities sold at DKK 1.0bn Net cash flow DKK 1.3bn (DKK 0.3bn) NIBD reduced to DKK 1.4bn (DKK 2.7bn) ROCE 8.0% (5.4%) and ROCE in core activities 9.6% (7.6%)

17. FLS Industries A/S Annual Accounts 2002 Financial highlights FLS Building Materials Annual Accounts 2002 FLS Building Materials – core activities DKKm 20012002 Net turnover 3,8733,925 EBITDA 680726 Earnings before interest and tax (EBIT) 324334 Earnings before tax (EBT) 355422 Cash flows from operating activities 512539 Cash flows from operating and investing activ. 81500 Return on capital employed (ROCE) 7.6%9.6%

18. FLS Industries A/S Annual Accounts 2002 Focusing FLS Building Materials Annual Accounts 2002 FLS Building Materials 2002 was a busy year focusing on divestments: Aalborg Portland:Ships Unicon:Paving stone activities in Poland, DK and US All US activities (RMC and Pumping) DEH:Højslev Teglværk and office building Divestment targets achieved in 2002 In 2003 the last non-core activities will be sold

19. FLS Industries A/S Annual Accounts 2002 Market FLS Building Materials Annual Accounts 2002 Aalborg Portland: White cement plants in Egypt and Malaysia on stream Conversion of grey kiln in Aalborg to white cement production Market share in grey cement maintained Unicon: Strategy to focus on ready-mix concrete implemented Focus on ready-mix concrete in Northern Europe Keener competition Dansk Eternit Holding: Focus on fibre cement Increases sales in Danmark Densit: Recession in industrial flooring FLS Building Materials

20. FLS Industries A/S Annual Accounts 2002 Prospects for 2003 FLS Building Materials Annual Accounts 2002 FLS Building Materials No support from market in Scandinavia Improved earnings from global sales of white cement Cost reductions and higher efficiency EBIT in 2003 on a par with 2002

21. FLS Industries A/S Annual Accounts 2002 Main conclusions Non-strategic business areas Annual Accounts 2002 Restructuring and capacity adjustments announced in 2001 are implemented From 2.3m to 1.6m man-hours Write-downs on stocks and buildings at about DKK 100m Higher pensions commitments during 2002 Order backlog exceeds DKK 9bn Long-term contracts account for 60% of capacity in 2003 Positive cash flow from operating activities 4th quarter earnings lower than anticipated – primarily due to sluggish order intake in Component Management FLS Aerospace

22. FLS Industries A/S Annual Accounts 2002 Financial highlights Non-strategic business areas Annual Accounts 2002 DKKm 20012002 Net turnover 3,0492,730 EBITDA 11554 Earnings before interest and tax (EBIT) (116)(202) Earnings before tax (EBT) (270)(289) Cash flows from operating activities (43)23 Cash flows from operating and investing activ. (245)(149) Net interest-bearing debt (NIBD) 1,3411,426 FLS Aerospace

23. FLS Industries A/S Annual Accounts 2002 Prospects Non-strategic business areas Annual Accounts 2002 Prospects for the aviation industry subject to great uncertainty – but key customers likely to continue to grow Due to cost reductions FLS Aerospace expects to significantly improve earnings in 2003. FLS Industries is studying opportunities for partnership / buyers of the company FLS Industries expects a settlement by end of 2003 FLS Aerospace

24. FLS Industries A/S Annual Accounts 2002 Main conclusions Annual Accounts 2002 Non-strategic business areas Restructuring and divestment of biomass and boiler activities implemented Air Pollution Control sold to F.L.Smidth Group at 1 July 2002 Focus on processing orders in hand - primarily desulphurisation plants Year’s net result mainly reflects difficult UK desulphurisation contract landed in 1999 Total additional project processing costs at DKK 500m Legal action against British steel and erection contractor under preparation Caught up with large part of the delay Critical erection phase expected finished in 2nd quarter 2003 FLS miljø

25. FLS Industries A/S Annual Accounts 2002 Financial highlights Annual Accounts 2002 Non-strategic business areas DKKm 20012002 Net turnover 1,6321,392 EBITDA (150)(641) Earnings before interest and tax(EBIT) (183)(659) Earnings before tax(EBT) (195)(779) Cash flows from operating activities 164(345) Cash flows from operating and investing activ. 139(435) Net interest-bearing debt (balances) (131)(402) FLS miljø

26. FLS Industries A/S Annual Accounts 2002 Prospects Annual Accounts 2002 Non-strategic business areas Continued focus on order processing and handling of related risks Biomass – operating and maintenance contracts to be sold FLS miljø projects negative earnings before interest and tax (EBIT) in 2003 There still remain projects that entail risks during the completion phase FLS miljø

27. FLS Industries A/S Annual Accounts 2002 Main conclusions and prospects Annual Accounts 2002 Non-strategic business areas FLS Industries has adjusted its activities and capacity in 4th quarter Pedershaab faced a sluggish market in 2002 Capacity adjustments introduced in 4th quarter Pedershaab to be sold in 2003 Dansk Træemballage sold at 1 October to the company’s management Sale of Secil shares expected to take place as expected – by the end of March at the latest A number of properties, sites and investments are to be sold by the end of 2003 Other activities

28. FLS Industries A/S Annual Accounts 2002 Prospects for 2003 2003 expected to be a challenging year due to difficult market conditions FLS Group expects A turnover slightly above DKK 15bn Earnings before interest and tax (EBIT) between DKK 300m and DKK 400m Earnings before tax (EBT) between DKK 250m and DKK 350m before disposals that may have a significant effect, either positive or negative, on the financial results.

29. FLS Industries A/S Annual Accounts 2002 Conclusion F.L.Smidth strongly placed as world’s number one in equipment for cement production, etc. Strongly placed in cement-related building materials in Northern Europe Improvement of core undertaking earnings Disposal of non-core undertakings Focus on improving cash flow from operating activities

30. FLS Industries A/S Annual Accounts 2002 2002 Questions