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2004

2004. Interim Report 2 nd Quarter 2004. Agenda. Main Conclusions 2nd Quarter Interim Report Market Developments Business Unit Highlights Financial Highlights Updated Guidance for 2004 Strategy Update. Q2 2004. Main conclusions – Interim Report Q2 04.

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2004

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  1. 2004 Interim Report 2nd Quarter 2004

  2. Agenda • Main Conclusions 2nd Quarter Interim Report • Market Developments • Business Unit Highlights • Financial Highlights • Updated Guidance for 2004 • Strategy Update Q2 2004

  3. Main conclusions – Interim Report Q2 04 • Satisfactory order intake and turnover • Improved earnings compared to last year • Varied performance in group companies - best results in Aalborg Portland, Unicon and Pfister- negative results in F.L.Smidth Airtech and FLS Aerospace • EBITA DKK 144m (H1 2003; DKK -304m) • NIBD DKK 3.1bn (Q1 2004; DKK 3.1bn) • Sale of FLS Aerospace finalised on 28 June • Agreement to sell Aalborg Portland and Unicon on 12 August • EBITA and EBIT guidance unchanged • EBT and turnover guidance updated

  4. Market Developments Cement • Positive trends in demand for new kiln capacity continue • 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

  5. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 2.832 (1) (8) (20) Q2 2003 2.121 (82) (90) (86) F.L.Smidth Highlights 2nd Quarter • Satisfactory order intake and turnover • Higher estimated costs of completing old projects Focus / Actions • Management succession in Global Functions • Centralisation of R&D efforts

  6. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 705 6 3 0 Q2 2003 554 31 28 31 FFE Minerals Highlights 2nd Quarter • Satisfactory order intake and turnover • Commissioning difficulties on two projects • Release of new projects delayed => Lower earnings forecast Focus / Actions • Controlled organisational growth • Top resources allocated to project close-out

  7. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 302 (57) (57) (55) Q2 2003 306 (17) (17) (16) F.L.Smidth Airtech Highlights 2nd Quarter • Considerable loss due to low turnover and higher provisions • Reduced earnings forecast Focus / Actions • Change of management • Focused product-portfolio • Sale of activities • Reduction in number of employees • Integration as a division in F.L.Smidth

  8. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 220 8 8 7 Q2 2003 161 (29) (29) (30) F.L.Smidth Automation Highlights 2nd Quarter • Satisfactory order bookings • Positive development in aftermarket Focus / Actions • Integration of F.L.Smidth Automation and F.L.Smidth activities in USA • Do. in India

  9. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 126 (17) (18) (18) Q2 2003 212 (23) (24) (24) F.L.Smidth Materials Handling Highlights 2nd Quarter • Suffering from low backlog at end of last year • Signs of increased activity Focus / Actions • Sale of Motan completed • Integrated as a division in F.L.Smidth

  10. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 141 (10) (10) (7) Q2 2003 308 (325) (325) (329) FLS miljø Highlights 2nd Quarter • Completion of West Burton and Eggborough according to plans, although hand-over postponed to Q4 • Guidance unchanged despite delay Focus / Actions • Take over procedures have been started up

  11. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 243 (10) (10) (11) Q2 2003 185 (18) (18) (21) MAAG Gear Highlights 2nd Quarter • Satisfactory order intake and turnover • Cost overruns in order execution Focus / Actions • Project managers reorganised and empowered • Cost control

  12. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 154 26 26 25 Q2 2003 108 12 12 11 Pfister Highlights 2nd Quarter • Satisfactory order intake, turnover and earnings • Temporary slowdown in China • International demand picking up Focus / Actions • International sales outside China • R&D

  13. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 104 9 9 9 Q2 2003 96 8 8 8 Ventomatic Highlights 2nd Quarter • Satisfactory order intake, turnover and earnings Focus / Actions • Product development • Order execution

  14. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 483 11 7 (2) Q2 2003 419 (24) (29) (40) Dansk Eternit Holding Highlights 2nd Quarter • Increased turnover • Improved earnings • Operating at full capacity in most segments Focus / Actions • Finalising the move of production facilities to the Czech Republic

  15. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 52 (2) (2) (3) Q2 2003 53 0 0 (1) Densit Highlights 2nd Quarter • Lower earnings vs. last year • Varied level of activity in business segments served Focus / Actions • SG&A costs • Sales

  16. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 872 210 207 185 Q2 2003 723 178 176 177 Aalborg Portland Highlights 2nd Quarter • Increased turnover in all units • Satisfactory earnings Focus / Actions • Procurement • Sales - white cement

  17. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 687 53 46 35 Q2 2003 611 19 13 (5) Unicon Highlights 2nd Quarter • High level of activity on all markets • Satisfactory earnings Focus / Actions • Ability to adjust capacity costs to changing level of activity

  18. Sale of Aalborg Portland and Unicon • Agreement to sell Aalborg Portland and Unicon to Cementir signed on 12 August • Sales price DKK 4.4bn on a debt free basis • Effect of sale DKK +0.6bn on EBT and DKK +0.4bn on equity, depending on timing of closing.

  19. DKKm YTD Net Turnover EBITA EBIT EBT Q2 2004 1,075 (35) (35) (190) Q2 2003 1,364 (23) (23) (125) Sale of FLS Aerospace • The sale of FLS Aerospace to SR Technics was finalised on 28 June 2004 • Loss on disposal of FLS Aerospace DKK 2,050m vs. previously announced DKK 2bn. Hereof DKK 97m recognised this year.

  20. Financial highlights 1st half year 2004 Turnover increasing in most operational unitsEBITA considerable improvement over last yearEBT negatively impacted by the sale of FLS Aerospace, positively impacted by earnings in Atlas Cement CFFO negative in FLS miljø and F.L.Smidth

  21. Balance Sheet

  22. Half year EBIT in recent years 1st half year 2004 • Considerable improvement over last year • Strong improvement in performance in Aalborg Portland, Unicon, Pfister and Dansk Eternit Holding • Reduced losses in F.L.Smidth, MAAG Gear, FLS miljøand FLS Aerospace

  23. Change in EBIT excl. non-recurring items +374 Improvement in ordinary performance DKK 374mvs. last year- primarily due to reduced losses in FLS miljø and F.L.Smidth

  24. Financial highlights 2nd Quarter 2004 (47) (excl. elim.) (130) in 2003 258 (excl. elim.) 160 in 2003

  25. Updated guidance for 2004 Updated guidance for 2004 • Turnover DKK 14bn (up from DKK13bn) • EBITA DKK 400-500m • EBIT DKK 300-400m • EBT DKK 750-850m(up from DKK 250-350m) • Based on ownership of Unicon and Aalborg Portland throughout 2004 • Closing prior to year-end will reduce turnover and earnings

  26. Strategy Update • Strategic Action Points • F.L.Smidth & Administratively FLS Industries merged • FLS Aerospace Sold • Aalborg Portland Sold and Unicon • Debt reduction This year • FLS miljø Last projects to be handed over shortly • Dansk Eternit HoldingRestructuring in progress • F.L.Smidth Restructuring in progress A Focused Company • with a unique global market position • supported by steady growth in global cement consumption • aiming for a 5% EBT ratio

  27. 2004 Questions

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