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Dalhoff Larsen & Horneman A/S 3. juni 2008

Den Danske Finansanalytikerforening. Dalhoff Larsen & Horneman A/S 3. juni 2008. Jørgen Møller-Rasmussen, CEO Claus Mejlby Nielsen, Vice President Treasury & IR . CONTENTS. General presentation 3 Q 1 2008, Group 12 Outlook 2008 18 Renewed strategy 22

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Dalhoff Larsen & Horneman A/S 3. juni 2008

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  1. Den Danske Finansanalytikerforening Dalhoff Larsen & Horneman A/S 3. juni 2008 Jørgen Møller-Rasmussen, CEO Claus Mejlby Nielsen, Vice President Treasury & IR

  2. CONTENTS • General presentation 3 • Q 1 2008, Group 12 • Outlook 2008 18 • Renewed strategy 22 • Renewed financial goals 27 • M&A activities 30

  3. CONTENTS • General presentation 3 • Q1 2008, Group 12 • Outlook 2008 18 • Renewed strategy 22 • Renewed financial goals 27 • M&A activities 30

  4. Forecast group revenues of DKK 5.7 billion in 2008 Largest producer of sustainable tropical hardwood in Africa >85% of DLH’s revenues are generated outside Denmark Strategic focus on interna-tional B2B timber trade after divestiture of building- materials-chain in DK to Saint-Gobain Sales and procurement offices, warehouses and processing facilities in 31 countries on 5 continents Approx. 3,600 employees Listed in Copenhagen since 1986 Market cap DKK 1.4 billion (EUR 175 million) IN SHORT One of the world’s major timber wholesalers

  5. INTERNATIONAL TIMBER TRADE Global sourcing, processing, trading and distribution of tropical and tempered hardwood products and timber-based sheet materials and softwood.

  6. FROM THE FOREST TO THE END-USER X

  7. TRENDS THEREFORE Focus on emerging markets Further globalisation More own processing Economies of scale via growth and efficiency measures (IT) Focus on sourcing • The consumption of timber is growing (most in the emerging markets, relatively) • International division of work increases cross-border trade • Processing moves upstream in the value chain • The market is getting more transparent • Shortage of raw materials

  8. HOUSE OF VALUES

  9. CORPORATE SOCIAL RESPONSIBILITY (CSR) Environment ∙ Human rights ∙ Social responsibility • Good Supplier Program • Enhanced efforts to introduce sustainability in the DLH Group’s businesses • Now the worlds largest supplier of certified tropical hardwood • Dialogue and cooperation for human rights

  10. STEPWISE IMPLEMENTATION OF FSCTropical Hardwood 12% • Separate CSR-publication as at 17 March 2008 • Leading position worldwide in sustainable tropical hardwood • 2nd forest concession in CIB, Congo, FSC certified Certification – FSC/PEFC 20% Verified Legal Compliance VLC/TLTV 24% Verified Legal Origin – VLO 80% Known origin 100% Known and unknown origin

  11. DIVIDEND AND SHARE BUY-BACK DKK/share of DKK 10 • Share buy-back programme • Launched 26 May 2008 • Up to DKK 100 million (7% of B-cap.) • ”Safe-harbour”-method • Ends 1 March 2009 • At a later stage DLH can issue new shares in connection with major acquisitions Financial year

  12. Agenda • This slide is animated. • Use the Agenda to draw attention to the key themes in your presentation. • All slides and objects in the presentation template is editable with PowerPoint. Guide CONTENTS • General presentation 3 • Q 1 08 12 • Outlook 2008 18 • Renewed strategy 22 • Renewed financial goals 27 • M&A activities 30

  13. GROUP INCOME STATEMENT

  14. Revenue Developement Q1 2008 DKK million -155

  15. INVESTED CAPITAL All operations end of 2007 Continuing Operations end of Q1 2008 3.234 3.234 2.914 Anlægsaktiver 729 2.914 Egenkapital1.068 Non-current assets 907 Equity1.172 Non-current assets 799 Equity 1.747 Netto-omsætnings-aktiver 2.143 Current Assets 2.115 Current Assets 2.327 Interest bearing debt2.062 Interest bearing debt1.166 DKK million

  16. CASH FLOWContinuing operations Discontinued operations 923 -2

  17. Agenda • This slide is animated. • Use the Agenda to draw attention to the key themes in your presentation. • All slides and objects in the presentation template is editable with PowerPoint. Guide Summary Q1 2008 • Overall picture: Weak market in Q1 - due to lower building activity - and an overstock situation in the market - hence declining prices - reduced turnover - and decreased EBIT-Margin - and high inventories • However a number of satisfying markets (e.g. Middle- & Far East, France, Eastern Europe, Sweden) • Successful divestment of Building Materials Division to Saint Gobain Large one-off income item

  18. Agenda • This slide is animated. • Use the Agenda to draw attention to the key themes in your presentation. • All slides and objects in the presentation template is editable with PowerPoint. Guide CONTENTS • General presentation 3 • Q1 2008, Group 12 • Outlook 200818 • Renewed strategy 22 • Renewed financial goals 27 • M&A activities 30

  19. FORECAST FOR 2008

  20. PROFIT BEFORE TAX DKK million 580

  21. AVERAGE INVESTED CAPITAL DKK million

  22. Agenda • This slide is animated. • Use the Agenda to draw attention to the key themes in your presentation. • All slides and objects in the presentation template is editable with PowerPoint. Guide CONTENTS • General presentation 3 • Q1 2008, Group 12 • Outlook 2008 18 • Renewed strategy 22 • Renewed financial goals 27 • M&A activities 30

  23. EQUITY STORY • Industry with growth potential • Strong business concept • Strong environmental profile • Considerable economies of scale • Structural opportunities

  24. BUSINESS BASIS 2008 Future market mix Future business mix Denmark14% Other Nordic countries15% Bygge-materialer23% Bygge-materialer23% Emergingmarkets23% Softwood & sheet materials30% Hardwood70% Other Western European countries 40% USA8% Træ &plade18% DKK 5.6 billion DKK 5.6 billion (percentage distribution of revenue)

  25. RENEWED STRATEGY The new DLH – one of the world’s leading timber wholesalers • Full focus on the international B2B trade with timber and timber products • Strengthened efforts to implement sustainability in DLH group units • Rapidly proceeding towards a market position as the world’s leading supplier of certified tropical hardwood • Strategic extension of the value chain:”From forest to end user” • Enlarged security of supply in the long term

  26. VALUE CHAIN Hardwood Softwood Sheet Materials Forest Sawmill Pro-cessing Export Import Distri-bution End customer

  27. Agenda • This slide is animated. • Use the Agenda to draw attention to the key themes in your presentation. • All slides and objects in the presentation template is editable with PowerPoint. Guide CONTENTS • General presentation 3 • Q1 2008, Group 12 • Outlook 2008 18 • Renewed strategy 22 • Renewed financial goals27 • M&A activities 30

  28. NEW FINANCIAL GOALS - GROUP *) ”…an aggregated growth during the strategic period which more than compensates the divested activities”.

  29. NEW FINANCIAL GOALS - SEGMENTS

  30. Agenda • This slide is animated. • Use the Agenda to draw attention to the key themes in your presentation. • All slides and objects in the presentation template is editable with PowerPoint. Guide CONTENTS • General presentation 3 • Q1 2008, Group 12 • Outlook 2008 18 • Renewed strategy 22 • Renewed financial goals 27 • M&A activities 30

  31. M&A • Acquisitioncandidates in a fragmented market • Multiples based on EVA approach • New share capital will only be issued to finance specific acquisitions

  32. BOHMANS, NOVEMBER 2005 Turnover: DKK 250 million

  33. TT TIMBER GROUP, JANUARY 2006 Turnover: DKK 1.300 million

  34. LJUNGBERGS, SEPTEMBER 2006 Turnover: DKK 300 million

  35. OLLE ZETTERGREN, JULY 2007 Turnover: DKK 80 million

  36. HUSTVEDT-GRUPPEN, AUGUST 2007 Turnover: DKK 140 million

  37. Slide Master • All slides and objects in the presentation template is editable with PowerPoint. • Edit slide no. and presentation footer in Show slide nr., date and name in: > Show >Header and Footer • Change the title and content for your purpose Guide PALMA, FEBRUARY 2008 Turnover: DKK 100 million

  38. PUUKESKUS OY, May 2008 Hardwood activities only

  39. FURTHER INFORMATION • Stock Brokers monitoring DLH • Danske Equities, Copenhagen • Nordea, Copenhagen • Kaupthing Bank, Copenhagen • Website (incl. investor presentations): www.dlh-group.com • IR-contact: cmn@dlh-group.com

  40. Break • This slide is animated. • Change the photo by marking the object > Click on Format AutoShape > Under Fill – Colour, > Choose Fill Effects > Go to Picture tab > Click on Select Picture tab > Choose picture > Click OK • The Picture will fade after 5 seconds to a green DLH background. • Use for a short break or as outro giving thanks to the audience. Guide www.dlh-group.com

  41. COMPETITION • No similar worldwide competitors • Regional players e.g. • Tradelink (Brazil  Europe, US) • Denker (SEA  NL, Germany) • Rougier (Africa  France) • Danzer (Africa  Germany etc.) • Large customers having own procurement organisation • Large producers having own sales agents.

  42. SHARE BASED INCENTIVE SCHEMES • Revolving share option programme for Group Management - 6 individuals(1% of outstanding shares) • Employees share programme issued in 2006 (1.3% of market value)

  43. SEGMENTATION 2007 • Revenue 2007 DKK 7,4b • F 2008 DKK 5,6b EBIT margin 2007 4,3% •  F 2008 2,9% SOLD Building materials23% Hardwood55% Timber & Board22% (% of revenue)

  44. RISKS • Commercial risks • Market and customer risks (Cyclical business) • Political risks and other supply risks (3rd world countries) • Financial risks • Foreign exchange rates (USD vs. EUR) • Interest rates and funding • Balance sheet risks • Inventories (Market prices) • Trade receivables • Prepayments to suppliers • Environmental and human rights matters (Compliance and reputation)

  45. Renewed strategy:FORESTRY • New investments in forests - Normally concessions and sawmills, exceptionally ownership of land - Cooperation with investors about investments in plantation, will become an important parameter in the CO2/climate solutions • Strategic necessity in certain tropical areas • Only in the Hardwood Division and presently only in Congo and Gabon • Supports the commercial interest regarding: - Supply security - Environment/sustainability (certification) - Test of new species

  46. SHARE PERFORMANCE

  47. TRADING VOLUME

  48. SHAREHOLDERS

  49. Renewed strategy:PROCESSING • New investments in processing • Often required precondition for own forest concessions • Only in Hardwood Division, predominantly in (7) supply countries • Typically kiln-drying and production of semi-finished goods, including a few finished products (f.inst. decking and flooring) • Supports commercial interests: - Environment and sustainability - ”Market leadership” in the supply part - Completes the supply chain - Able to buy ”mill-run” from external sawmills

  50. Renewed strategy:TRADING • Organic growth without capital investments • Innovated focus in both divisions • Back to back businesses with limited tied up capital • Supports the commercial interests regarding: - Markets without DLH distribution activity - Introduction to new markets - Utilization of imbalances in international trade - Sales channel for surplus of own production

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