FLS Industries A/S

Year 2000

8 March 2001

Peter Assam, CEO, and Birgitte Nielsen,CFO

FLS Industries A/SFLS Industries A/S

2Restructuring for Growth and Profit

AGENDA FOR 8 MARCH 2001AGENDA FOR 8 MARCH 2001

2000 - a landmark year2000 - a landmark year

Ratio for merging FLS with APHRatio for merging FLS with APH

DEF 1994 DEF 1994

4 Core businesses4 Core businesses

Group financialsGroup financials

2001 and onwards2001 and onwards


YEAR 2000 - A LANDMARK YEARYEAR 2000 - A LANDMARK YEAR

New strategy - actively focussing, restructuring and streamlining the GroupNew strategy - actively focussing, restructuring and streamlining the Group- Selling RMIG- Selling RMIG- Transferring Johannes Möller- Transferring Johannes Möller- New FLSmidth- New FLSmidth- Purchase of 50% of Aalborg Portland A/S- Purchase of 50% of Aalborg Portland A/S

Announcing FLS-APH merger aligning Group structure with stock market requirementsAnnouncing FLS-APH merger aligning Group structure with stock market requirements- concentrating operating assets in one company- concentrating operating assets in one company

Disappointing EBIT of DKK - 458mill. Disappointing EBIT of DKK - 458mill. CFFO was DKK -26mill. CFFO was DKK -26mill.

Result reflects a year with restructuring costs and major one off costsResult reflects a year with restructuring costs and major one off costs


STABLE MARKET CAPS OF FLS & APH OPERATING UNITSSTABLE MARKET CAPS OF FLS & APH OPERATING UNITS

Merger is announced 21/11-2000

0

2

4

6

8

10

12

03/01/2000 23/02/2000 14/04/2000 15/06/2000 07/08/2000 27/09/2000 17/11/2000 12/01/2001 06-03-2001

DKK Bn.

FLS Industries

Aalborg Portland Holding

Aalborg Portland operatingunits


SHARP HIKE IN MARKET CAP OF APH OPERATING UNITSSHARP HIKE IN MARKET CAP OF APH OPERATING UNITS

Return since

20 Nov 2000

FLS -18%

KFX -3%

Ind. Comp. -7%

MSCI Build Mat +9%

APH +15%

APH ex. NKT +116%

20

70

120

170

220

270

03/01/2000 23/02/2000 14/04/2000 15/06/2000 07/08/2000 27/09/2000 17/11/2000 12/01/2001 3/6/01

Index (20/11-2000 = 100)

FLS Industries A/S

Aalborg Portland Holding

Aalborg Portland x. NKT


THE MARKET SETS THE RATIO - FLS : APH OPERATING UNITSTHE MARKET SETS THE RATIO - FLS : APH OPERATING UNITS

1,2

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

03/01/2000 23/02/2000 14/04/2000 15/06/2000 07/08/2000 27/09/2000 17/11/2000 12/01/2001 3/6/01

(DKK) 21.02-06.03 Today

APH: 308 295

- dividend: 5 5

- 0,1* NKT: 172 155

APH ex NKT and div.: 131 135

FLS: 115 115

- dividend: 3 3

FLS ex dividend: 112 112

Ratio: 1.17 1.20

Ratio


TRANSFERRING BUILDING MATERIAL OPERATIONS TO FLS INDUSTRIES

2 5 % N K T H o ld ing2 2 % S e c il

3 4 % S p æ n com

F L S m id th"F L S B u ild in g M a te ria ls"

F L S m iljøF L S A e rosp a ce

1 ,2 F L S In du s trie s BP rice : 1 15

1 ,2 * 11 5 = 1 38T o p 30 v -a -v K FX

0 ,1 * N K T H o ld ingP rice : 17 24

0 ,1 * 17 2 4 = 1 72K F X

1 A P H A /Bp rice : 3 08S m all cap

FLS Industries pays with 6,713,115 new B shares + 38,115 old B shares

Share capital increases to DKK 1,064 mill with

7,200,000 A shares and 46,000,000 B shares


OWNERSHIP STRUCTURE - POST MERGER IN MAYOWNERSHIP STRUCTURE - POST MERGER IN MAY

2 5 % N K T H O L D IN G 2 2 % S E C IL 3 4 % S P Æ N C O M

4 7 % F L S IN D U S T R IE SF L S m id th , F L S A e rosp a ce ,F L S m iljø

"F L S B u ild in g M a te ria ls"

P O T A G U A


DEF94 – DEVELOPMENTAL DEFECTS CASEDEF94 – DEVELOPMENTAL DEFECTS CASE

Why an explanation of the course of events? Why an explanation of the course of events?

-- The decision to apply for a suspension of payments order for The decision to apply for a suspension of payments order for DEF 1994 should be viewed in the full context of the DEF 1994 should be viewed in the full context of the developmental defect casedevelopmental defect case

-- The Group’s employees, shareholders and other The Group’s employees, shareholders and other stakeholders should know the full course of eventsstakeholders should know the full course of events


DEF94 – DEVELOPMENTAL DEFECTS CASEDEF94 – DEVELOPMENTAL DEFECTS CASE

The reasons behind the DEF 1994 suspension of payments:The reasons behind the DEF 1994 suspension of payments:

• The High Court judgement in June 2000 extends liability for damages The High Court judgement in June 2000 extends liability for damages – impossible to estimate financial consequences– impossible to estimate financial consequences

• Pending arbitration case abroad will result in further claims being Pending arbitration case abroad will result in further claims being raised against DEF 1994raised against DEF 1994

- High Court judgement appealed to the Supreme Court- High Court judgement appealed to the Supreme Court

Why suspension of payments?Why suspension of payments?

• Freeze DEF 1994 funds until the Supreme Court passes judgement Freeze DEF 1994 funds until the Supreme Court passes judgement (October 2001)(October 2001)

- all creditors on an equal footing- all creditors on an equal footing


DKKmDKKm 1998 1998 1999 1999 2000Net turnover 6,738 6,671 7,456Gross profit 1,493 1,365 1,117EBIT 267 83 -269Result for the year 221 57 -333

Capital Employed, average 2,977 3,223 3,341Cash flows from operating activities -135 512 -37Cash flows from operating an investing activities -380 408 -105

Turnover Order intake* Order Backlog* 2000 2000 2000

Cement 75% 73% 82%Mineral processing 12% 16% 10%Pyroprocessing 3% 3% 2%Chemical and petrochemical 2% 3% 1%Power generation 3% 2% 3%Other 5% 3% 2%Sales 7,456 7,012 6,205*sales prices*sales prices


- NET SALES- NET SALES

Denmark1%

Europe19%

America41%

Asia15%

Africa24%


Order Intake 1990-2000 Order Intake 1990-2000 Major and Basic orders, SalesMajor and Basic orders, Sales

DKK Mill.

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Basic orders Major orders


US joint ventures1 handed over to customer1 running tests according to plan

After-market sales of DKK 2bn with growth

Order intake on budget with satisfactory order backlog

Good prospects for new order

Integration as planned

Key account management established


DKKmDKKm 19981998 1999 1999 2000

Net turnover 2,324 4,621 5,621

Gross profit 1,007 2,059 2,377

EBIT 384 461 429

Result for the year 495 1,119 1,638

Capital Employed, average 3,545 5,871 7,681

Cash flows from operating activities 473 741 673

Cash flows from operating and investing activities -700 42 -1,313



Denmark39%

Europe34% America

25%

Asia1%

Africa1%


Aalborg PortlandAalborg Portland

White strategy progressing in Sinai, Malaysia and AalborgWhite strategy progressing in Sinai, Malaysia and Aalborg-Sinai on target/before schedule-Sinai on target/before schedule-Malaysia on target-Malaysia on target

Sale of grey cement at full capacitySale of grey cement at full capacity

Unicon GroupUnicon Group

Unicon’s turnaround in the US - progress according to planUnicon’s turnaround in the US - progress according to planUnprofitable Philippine r-m-c operation closedUnprofitable Philippine r-m-c operation closedExit loss making Spanish concrete product activities Exit loss making Spanish concrete product activities

Best result ever in ScandinaviaBest result ever in Scandinavia


Dansk Eternit HoldingDansk Eternit Holding

Polish acquisition in a bolt-on European expansionPolish acquisition in a bolt-on European expansionNew capacity successfully on steam in Czech Republic and DenmarkNew capacity successfully on steam in Czech Republic and DenmarkNew cross-border organisation cuts costs New cross-border organisation cuts costs

Densit Densit

New off-shore orders - wind turbines and oil platformsNew off-shore orders - wind turbines and oil platformsJoint venture in UK to strengthen market presenceJoint venture in UK to strengthen market presenceAll time high order backlogAll time high order backlog


DKKmDKKm 1998 1998 1999 1999 2000

Net turnover 1,688 2,962 3,282Gross profit 531 750 301EBIT -39 -146 -375Result for the year -134 -212 -562

Capital Employed, average 1,677 2,486 2,808Cash flows from operating activities -3 -216 -423Cash flows from operating and investing activities -588 -826 -764

Profit in Q4, EBIT DKK 50 mill., EBT DKK 5 mill.

Formula 1 gathers pace across the organisation Better prices for improved products and services at less costs



Denmark6%

Europe80%

America11%

Asia1%

Africa2%


DKKmDKKm 19981998 1999 1999 2000Net turnover 1,891 1,958 1,533Gross profit 337 367 179EBIT 14 15 -193Result for the year -6 11 -207

Capital Employed, average 439 426 496Cash flows from operating activities -86 -119 -228Cash flows from operating and investing activities -105 -164 -260

Turnover Order intake* Order Backlog*2000 2000 2000

Power stations, biomass 15% 4% 6%Power stations, fossil fuel 45% 46% 62%Waste incineration 4% 2% 1%Industrial 27% 38% 13%Operation and maintenance 9% 10% 18%Sales 1,533 1,236 2,147*sales prices



Denmark18%

Europe51%

America18%

Asia11%

Africa2%


New management focussing on key skillsNew management focussing on key skills

Leverage technological edge via international partnersLeverage technological edge via international partners

Restructuring of business units and outsourcing continues unabated to Restructuring of business units and outsourcing continues unabated to improve efficiency improve efficiency

Present order backlog is weak but several large scale projects may Present order backlog is weak but several large scale projects may materialise materialise


PROFIT & LOSS ACCOUNTPROFIT & LOSS ACCOUNT

DKKmDKKm 19981998 19991999 2000

Net SalesNet Sales 22,23822,238 20,99320,993 19,205

EBITDAEBITDA 1,6361,636 1,3941,394 545

EBITEBIT 858858 475475 -458

EBTEBT 1,1471,147 2,7562,756 729

Profit for the yearProfit for the year 794794 2,5402,540 843


FLS GROUP - NET SALESFLS GROUP - NET SALES

FLSmidth39%

FLS miljø8%

APH29%

FLS Aerospace

17%

Other7%


FLS GROUP - NET SALESFLS GROUP - NET SALES

Denmark

16%

Europe40%

America27%

Asia7%

Africa10%


CASH FLOW

DKKmDKKm 19981998 1999 1999 2000

Cash flow from operationsCash flow from operations 602602 794794 -26Cash flow from investmentsCash flow from investments -2,174-2,174 321321 -2,500Cash flow from financingCash flow from financing 1,3991,399 -948-948 2,175Change in cash fundsChange in cash funds -173-173 167167 -351

Operations:Operations: Lack of orders, poor results Lack of orders, poor results

Investments: NKT share buy-back, large acquisitions in APHInvestments: NKT share buy-back, large acquisitions in APH

Financing:Financing: Dividend, increase in NIBD and reduction in cash funds Dividend, increase in NIBD and reduction in cash funds


CAPITAL EXPENDITURES

DKK/mill.DKK/mill. F.L.SmidthF.L.Smidth FLS miljøFLS miljø APHAPHAerospaceAerospace

IntangibleIntangible 77 -- 5151

--

TangibleTangibleLand & BuildingLand & Building -- 22 8585

2020

Plant & MachineryPlant & Machinery 4141 11 2502502121

Other fixturesOther fixtures 3636 88 1301305757

RotablesRotables -- -- --292292

OtherOther 66 -- 11--

AcquisitionsAcquisitions 5252 -- 2.0632.063--

TotalTotal 142142 1111 2.5802.580390390


BALANCE SHEET - ASSETS

DKKmDKKm 19981998 19991999 2000

Intangible fixed assetsIntangible fixed assets 351351 151151 1.308Tangible fixed assetsTangible fixed assets 7.1417.141 7,3377,337 8,028Fixed assets investmentsFixed assets investments 2.3702.370 2,8782,878 4,284

StocksStocks 1,8901,890 2,8682,868 2,989DebtorsDebtors 5,6915,691 5,1115,111 4,931

Cash, bonds and other securitiesCash, bonds and other securities 861861 1,0491,049 651

Total assets Total assets 18,30418,304 19,39419,394 22,191


BALANCE SHEET - LIABILLITIES

DKKmDKKm 1998 1998 1999 1999 2000

Equity (incl. minority interests´ share)Equity (incl. minority interests´ share) 5,791 5,791 8.0838.083 7,966

ProvisionsProvisions 1,4131,413 1,3731,373 1,467

Long term liabilitiesLong term liabilities 3,8043,804 2,4322,432 5,180Short term liabilitiesShort term liabilities 7,2967,296 7,5067,506 7,578

Total liabilities Total liabilities 18,30418,304 19,39419,394 22,191


2001 AND ONWARDS 2001 AND ONWARDS

Distributing NKT-shares and DKK +1bn in dividends while merging FLS Industries with APHDistributing NKT-shares and DKK +1bn in dividends while merging FLS Industries with APH

Very sound order book in FLSmidth with service etc. growing at +10% annually Very sound order book in FLSmidth with service etc. growing at +10% annually Synergies and optimising on three centres will improve financial performanceSynergies and optimising on three centres will improve financial performance

White cement capacity doubles in 18 months to 1½ mill tonnes and to 3 mill tonnes in 2005 White cement capacity doubles in 18 months to 1½ mill tonnes and to 3 mill tonnes in 2005

Unicon US is being turned around through 2001 and 2002Unicon US is being turned around through 2001 and 2002

DEH benefits from upgraded plants hiking productivity and quality DEH benefits from upgraded plants hiking productivity and quality

Densit grows internationally according to strategyDensit grows internationally according to strategy

FLS Aerospace ensures strategic value in a consolidating industry by normalising profitability FLS Aerospace ensures strategic value in a consolidating industry by normalising profitability by end of 2001by end of 2001

New CEO in FLS miljø continues to reshape and focus the company looking for partners to New CEO in FLS miljø continues to reshape and focus the company looking for partners to leverage technological edgeleverage technological edge

OUTLOOK FOR 2001

EBIT DKK 0.7bn

PBT DKK 0.5bn

Sales DKK 21bn

Documents

FLS Industries A/S