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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/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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 A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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
SOLD
WIND UP
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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 world’s leading suppliers of dosing equipment to the cement industry and related industries
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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 world’s leading suppliers of complete packing lines to the cement industry and related industries
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
Project Centre Production Sales Office
The World excl. Europe
Geographical presence
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
Project Centre Production Sales Office
Europe
Geografical presence
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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 designEnquiryTender Documents
Technical specifications
Contract draft
QuotationNegotiationsModifications
Contractaward
Approximately 3 months. 3 – 9 months
From tender to contract
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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 (CO2, NOx and other emissions, etc.)
Reduced production costs (Energy consumption, productivity, etc.)
Top priority: Reduced use of fossil fuels
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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%
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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.
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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.
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie 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
FLS Industries A/SCarnegie Small Cap Seminar, Stockholm 14 September 2004 FLS Industries A/SCarnegie Small Cap Seminar 14 September 2004 Stockholm
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