FLS Industries A/S

1
FLS Industries A/S
3rd quarter 2000
21 November 2000
2
Q3 2000

• Distribution of APHs NKT-shares and planned
  merger of FLS and APH
• Estimate for EBIT-2000 down from DKK -200 mill.
  to DKK -450 mill.
• Result for 1st - 3rd quarter shows a
  disappointing EBIT of DKK -569 mill.
• CFFO has improved with DKK 378 mill. in Q3 due to
  reduction in working capital
• Substantial investments in Q3 in e.g. Aalborg
  Portland A/S, Aalborg RCI White Cement, Unicon
  Norway and US
• During Q1-Q3 2000 the Group created EVA of DKK
  61mill. equalling a ROCE of 7 for the period.
• Corrected for NKT Holding, FLS Industries
  realised EVA of DKK -1,650 mill.

3
Unlocking shareholder value

• Distributing 35-stake in NKT Holding to APHs
  shareholders
• 10 to minorities
• 25 to FLS Industries
• Merging FLS Industries and Aalborg Portland
  Holding
• aligning operational and legal structure
• all operations in one quoted company
• Swapping small cap APH-shares into KFX-shares
  ( NKT) and TOP30 stocks (FLS)
• Increasing free float of FLS and NKT shares

4
Ownership structure
Prior to merger
POTAGUA (B shares)
52
FLS INDUSTRIES (A, B shares)
F.L. Smidth - Fuller Engineering
FLS Aerospace
FLS miljø
70
AALBORG PORTLAND HOLDING (A, B shares)
Aalbog Portland A/S
Unicon Beton
Dansk Eternit Holding, Densit
29
35
NKT Holding
Spæncom
5
Ownership structure
Post merger
POTAGUA (B shares)
lt50
FLS INDUSTRIES (A, B shares) F.L.Smidth-Fuller
Engineering APH-Group FLS Aerospace FLS miljø
25
29
NKT Holding
Spæncom
6
FFE

• DKKm Q1-Q3 1999 Year 1999 Q1-Q3 2000
• Net turnover 4,062 6,671 5,381
• Gross profit 897 1,365 702
• EBIT -35 83 -301
• Profit for the period 3 57 -245
• Cash flows from operating activities 151 512 -133
• Cash flows from operating an investing
  activities 72 408 -137
• Turnover Order intake Order Backlog
• Q1-Q3 2000 Q1-Q3 2000 30.09.2000
• Cement 4,078 4,321 5,943
• Mineral processing 597 675 454
• Pyroprocessing 180 122 98
• Chemical and petrochemical 138 135 47
• Power generation 141 102 107
• Other 246 293 305
• Total 5,381 5,649 6,954

7
Order Intake 1990-2000 , Sales (Major orders gt
DKK 50 mill.,gt DKK 10 mill. contribution)
DKK Mill.
8
(No Transcript)
9
APH-group

• DKKm Q1 - Q3 1999 Year 1999 Q1 - Q3 2000
• Net turnover 3,477 4,621 4,136
• Gross profit 1,520 2,059 1,823
• EBIT 319 461 353
• Profit for the period 1,033 1,119 1,754
• Cash flows from operating activities 636 741 551
• Cash flows from operating and investing
  activities 203 42 -1,313

10
APH-group

• Aalborg Portland
• - full control facilitates the white strategy,
  i.e. flexibility in production and management
  resources
• Unicon Beton
• - turn around plan for Unicon US
• - focus on Scandinavia, Baltic and Carolinas -
  out of Philippines
• Dansk Eternit Holding
• - finalising upgrade of plants and announced
  staff reductions
• Densit
• - successful international sales strategy
• - 1st order to wind turbine industry

11
Sales - APH group 9 months 2000
Sales - APH group 9 months 2000
Africa
Asia
1
1
North-
Southamerica
Denmark
26
41
Europe
Scandinavia
23
8
12
FLS Aerospace

• DKKm Q1 - Q3 1999 Year 1999 Q1 - Q3 2000
• Net turnover 2,128 2,962 2,403
• Gross profit 286 750 65
• EBIT 65 -146 -427
• Profit for the period 6 -212 -567
• Cash flows from operating activities -387 -216 -26
  4
• Cash flows from operating and investing
  activities -704 -826 -577

13
FLS miljø

• DKKm Q1 - Q3 1999 Year 1999 Q1 - Q3 2000
• Net turnover 1,349 1,959 1,134
• Gross profit 205 367 128
• EBIT -22 15 -157
• Profit for the period -25 15 -172
• Cash flows from operating activities 6 -119 -104
• Cash flows from operating and investing
  activities 8 -164 -127
• Turnover Order intake Order Backlog
• Q1 - Q3 2000 Q1 - Q3 2000 30.09.2000
• Power stations, biomass 166 20 167
• Power stations, fossil fuel 466 293 1,298
• Waste incineration 15 16 16
• Industrial 391 339 336
• Operation and maintenance 95 97 407
• Total 1,134 765 2,225

14
Profit Loss Account

• DKKm Q1-Q3 1999 Year 1999 Q1-Q2 2000 Q1-Q3 2000
• Net Sales 15,504 20,939 9,169 13,980
• EBITDA 963 1,394 13 149
• EBIT 383 475 -420 -569
• EBT 2,692 2,756 1,206 956
• Result for the period 2,539 2,540 1,117 808

15
Cash flow

• DKKm Q1-Q3 1999 Year 1999 Q1-Q2 2000 Q1-Q3 2000
• Cash flow from operations 490 794 -621 -243
• Cash flow from investments 866 321 -288 -2,291
• Cash flow from financing -1,399 -948 446 2,331
• Change in cash funds -43 167 -463 -203
• Operations lack of orders, increase in working
  capital
• Investments NKT buy-back, APH
• Financing dividend, increase in NIBD and
  reduction in cash funds

16
Balance Sheet - Assets

• DKKm Q3 1999 Year 1999 Q2 2000 Q3 2000
• Intangible assets 111 151 174 1,286
• Tangible assets 6,918 7,337 7,580 8,153
• Financial assets 2,733 2,878 4,376 4,465
• Stocks 2,731 2,868 2,920 2,824
• Accounts receivable 5,155 5,111 5,349 4,648
• Cash, bonds and other securities 904 1,049 590 817
  
• Total assets 18,753 19,394 20,989 22,194

17
Balance Sheet - Liabilities

• DKKm Q3 1999 Year 1999 Q2 2000 Q3 2000
• Equity 8,147 8.083 8,583 8,010
• Provisions 1,205 1,373 1,696 1,671
• Long term debt 2,495 2,432 3,015 4,336
• Short term debt 6,906 7,506 6,746 8,147
• Total liabilities 18,753 19,394 20,989 22,194

18
Revising EBIT-2000 from DKK -200 mill. to DKK
-450 mill.
DKKm Previous estimate (28 August 2000)
-200 Reduction in FFE restructuring
costs 30 Increasing losses on Turnkey Projects
-130 Write-offs in FFE -60 Write-offs and
provisions in FLS Aerospace -50 Lower order
intake, losses on projects in FLS
miljø -20 Others -20 Total -450
19
Strategy and other non-recurring items, 3rd
quarter 2000
DKKm
1st half 2000 2nd half 2000
Total Strategy - FFE 0 70 70 - FLS
miljø 0 65 65 - FLS Aerospace (restructuring) 330
50 380 - Other 0 55 55 Total strategy
cost 330 240 570 Non recurring items - FFE
(turnkey projects) 200 130 330 - FFE
(write-offs) 60 60 - FLS miljø (lower order
intake) 85 20 105 - FLS Aerospace 50 50 - APH
25 45 70 Total non recurring items 310 305 615 T
otal 640 545 1,185
20
Q3 2000 and onwards

• Distributing NKT-shares and merging FLS
  Industries with Aalborg Portland Holding
• Very sound order book in FFE focusing on service.
  New FFE in place January 1, 2001
• White cement and specialty mortar progress
  according to plan
• DEH will benefit from upgraded plants
• Unicon US is being turned around during 2001
• FLS Aerospaces new management team heading for
  normalised profitability end 2001
• FLS miljø focusing on core competencies
• Non-recurring items of more than DKK 1.1bn in
  2000 behind us