presentation2001

Slide1: 

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level ﴀ ﴀ 1 DEN NYE STRATEGI Annual report 2001 FLS INDUSTRIES A/S Presented by Peter Assam, CEO Birgitte Nielsen, CFO 7 March 2002

Agenda: 

Agenda 2001 - highlights focusing and improving earnings platform mixed market conditions operational earnings and cash flow improved pruning of balance sheet 2002 and onwards focus, rightsizing and cutting debt

Focusing and improving earnings platform: 

Focusing and improving earnings platform Focusing merger of Aalborg Portland Holding and FLS Industries sale of RMIG sale of property Improved Earnings Platform procurement project Engineering Bulk Handling activities transferred to new unit reorganising all APC into one global business unit integration of F.L.Smidth & Co. and Fuller Co acquisitions strengthens FLSmidth Group’s product range and turnkey skills FLS miljø continues rightsizing ”Waste to Energy” sold

Focusing and improving earnings platform: 

Focusing and Transparency merger of Aalborg Portland Holding and FLS Industries sale of RMIG sale of property Improved Earnings Platform procurement project Building Materials concrete products in US and Spain exited investments in white cement strengthens platform new management to turn around US concrete operation Unicon focuses on ready mix concrete Unicon’s Norwegian acquisitions fortify lead position in Scandinavia DEH reorganises from country set up to functions Focusing and improving earnings platform

Focusing and improving earnings platform: 

Focusing and Transparency merger of Aalborg Portland Holding and FLS Industries sale of RMIG sale of property Improved Earnings Platform procurement project Aerospace rightsizing to post 11 September demand “right first time” introduced in CPH international management team Formula One program reduces turn times and cuts man hours per check improved efficiency in Rotables utilisation decreased overheads and pay roll Focusing and improving earnings platform

F.L.Smidth Group: 

F.L.Smidth Group (272) EBIT (38) Cash flows from operating activities (107) 1,105 15% 7,389 2000 2001 7,982 1,476 18% 194 (384) (539) Gross profit Cash flows from operating and investing activities Net turnover Margin up SG&A down Better order execution

F.L.Smidth Group order intake: 

F.L.Smidth Group order intake Good balance between basic - and large orders Highest order intake ever

Annual contracted cement kiln capacity: 

Annual contracted cement kiln capacity Highest order intake ever -despite lowest new capacity in 15 years Average contracted 1980 – 2001 25 MPTY

FLS miljø: 

FLS miljø Margin slippage on projects Order intake remains sluggish in biomass and fossil

FLS Building Materials: 

FLS Building Materials Markets suffer from economic downturn – but still good cash flow Danish fibre cement sales hurt by image problem

FLS Building Materials: 

FLS Building Materials White strategy goes as planned Unicon continues focusing DEHs new products received well Densit offshore break through

FLS Aerospace: 

FLS Aerospace Gross profits margin doubled Cash flow strongly improved Strong position in low cost segment

FLS Group Profit and Loss Account: 

FLS Group Profit and Loss Account Improved gross profits and cash flow Significant reduction of debt

2002 and Onwards: 

2002 and Onwards Optimise across F.L.Smidth Group speed up after-market sales - spares and services improve turnkey and civil engineering skills focus on cement and minerals segments FLS miljø Grows Three Segments marketing technologies via international partnerships or new owners use core know-how in new businesses on ad hoc basis Harvest Synergies between Engineering Companies Grow Key Product Areas in FLS Building Materials expand global production capacity in white cement consolidate industry and specialise fibre cement plants - expand product range transfer “best practice” in Unicon’s One Company program - turnaround US concrete operation leverage Densit’s off-shore orders Optimise Strategic Value of FLS Aerospace Divest Non-Core Assets, Prune Balance Sheet and Cut Debt

Slide15: 

FLS forecast Sales DKK19bn EBIT Improved compared to 2001 EBT Improved compared to 2001 - given the present difficult market outlook - excluding sale of assets Forecast 2002 Restructuring for Growth and Profit

 Q1-Q4-Events: 

Q1: F.L.Smidth Group Deficit from Weak US-Market and Higher Execution Costs time lag between slow demand from US-market and reaction hereto Q2: order intake, back log and target intact despite US slow down largest order in European market acquisitions broaden product range and strengthen turnkey skills FFE Minerals’ high performance reflects restructuring after-market sales maintains growth target Q3: satisfactory order intake despite weak markets Q4: satisfactory order intake - Vietnam order signed financial effects from merger materialising Q1-Q4-Events

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Q1: FLS miljø’s Order Backlog End 2000 Was Poor order intake Q1 was below expectations cost base matches order potential in next months Q2: order intake and outlook improves in US and Europe business tracks new management’s plan Q3: slowing order intake order execution off track on UK project Q4: order intake remains sluggish in biomass and fossil Margin slippage on projects Q1-Q4-Events

 Q1-Q4-Events: 

Q1: FLS Building Materials Usually Posts Deficit in Q1 Dansk Eternit suffers from DEF 1994’s receivership Sales reflect normalised weather conditions Q2: Dansk Eternit’s sales slip further in Denmark US slowdown dampens Unicon’s profit in turnaround Cement export offsets lower demand in Denmark International price pressure on white cement Down revision of earnings forecast Q3: US and Polish stand still fuels down revision Q4 DEHs new products received well Unicon starts divesting concrete products Markets suffer from economic downcycle Q1-Q4-Events

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Q1: FLS Aerospace Improves Performance in High Season Q2: Third consecutive quarter with EBIT in black Strong USD hikes costs in Component Management Higher productivity and renegotiated contracts increase earnings expectations Q3: Continuous improvement until 11 September Q4: Restructuring to volumes drop of 20 % y/y PMO contract of DKK 3.1 bn with easyJet Q1-Q4-Events