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Presentation of Annual Report 2012Presentation of Annual Report 2012

12 February 2013Annual Report 2012 1

Annual Report 2012

Forward-looking statementsFLSmidth & Co. A/S’ financial reports, whether in the form of annual reports or interim reports, filed with the Danish Business Authority and/or announced via the company’s website and/or NASDAQ OMX Copenhagen, as well as any presentations based on such financial reports, and any other written information released, or oral statements made, to the public based on this interim report or in the future on behalf of FLSmidth & Co. A/S, may contain forward-looking statements.

Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements.Examples of such forward-looking statements include, but are not limited to:• statements of plans, objectives or goals for future operations, including those related to FLSmidth & Co. A/S markets, products, product research and product

development• statements containing projections of or targets for revenues, profit (or loss), capital expenditures, dividends, capital structure or other net financial items• statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings and statements regarding the underlying g g p , g g p g g g y g

assumptions or relating to such statements• statements regarding potential merger & acquisition activities. These forward-looking statements are based on current plans, estimates and projections. By their very

nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which may be outside FLSmidth & Co. A/S’s influence, and which could materially affect such forward-looking statements.

FLSmidth & Co. A/S cautions that a number of important factors, including those described in this presentation, could cause actual results to differ materially from those contemplated in any forward-looking statements.p y g

Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and exchange rate fluctuations, delays or faults in project execution, fluctuations in raw material prices, delays in research and/or development of new products or service concepts,interruptions of supplies and production, unexpected breach or termination of contracts, market-driven price reductions for FLSmidth & Co. A/S’ products and/or services, introduction of competing products, reliance on information technology, FLSmidth & Co. A/S’ ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in legislation or regulation and interpretation thereof, intellectual property protection, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign enterprises, unexpected growth in costs


and expenses, failure to recruit and retain the right employees and failure to maintain a culture of compliance.Unless required by law FLSmidth & Co. A/S is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this presentation.

Record high revenue and strong operating cash flow in Q4’12

2012 full-year guidance met:DKK 25bn revenue and 10% EBITA margin g

Super profits in Cement offset by losses in Material HandlingSatisfactory order intake despite short term weakness in marketSatisfactory order intake despite short term weakness in market

2013 expected to be trough year in terms of EBITA marginPlanned cash distribution of DKK 1bn incl. share buyback


Q4 Results 2012

Order intake up 4% on Q4’11, lifted by a strong order intake in Customer

Financial developments in Q4 2012FLSmidth & Co. A/S(DKKm) Q4 2012 Q4 2011 Change y g

Services (O&M DKK 1.1bn)

Revenue up 16% to a record high, attributable to all segments but Material Handling

(DKKm)

Order intake 6,104 5,856 +4%Order backlog 29,451 27,136 +9%Revenue 8,051 6,911 +16%

EBITA down 4%, due to execution problems in Material Handling

EBIT down 8%, adversely impacted by effects of purchase price allocations amounting to DKK 86m in Q4 (Q4’11:

, ,Gross margin 23.4% 26.1%EBITA 890 931 -4%EBITA margin 11.1% 13.5%

amounting to DKK -86m in Q4 (Q4 11: DKK -48m)

Very strong operating cash flow

Excluding acquisitions, the number of employees increased 8% in 2012

EBIT 796 865 -8%EBIT margin 9.9% 12.5%Net results1) 462 567 -19%CFFO 1,532 260 employees increased 8% in 2012,

most of which is related to O&M contracts

12 February 2013 4

CFFO 1,532 260Employees2) 14,827 12,146 +22%

Annual Report 2012

1) Including Cembrit2) Excluding Cembrit

Annual Report 2012

Segment developments in Q4 2012

Order intake Q4 2012Revenue Q4 2012 Order intake Q4 2012– classified by segment

Cement

Revenue Q4 2012 – classified by segment

Customer ServicesCement

39%39%

10%10% Customer Services26%26%

18%18%Customer Services

11%11%

40%40%16%16%

40%40%Material HandlingMineral Processing

Mineral Processing


Material Handling

Q4 Results 2012

Order intake up 15% on 2011 due to a very strong order intake in Customer

Financial developments in 2012FLSmidth & Co. A/S(DKKm) 2012 2011 Change y g

Services

Revenue up 21% attributable to Customer Services and Mineral Processing

(DKKm)

Order intake 27,727 24,044 +15%Order backlog 29,451 27,136 +9%Revenue 24,849 20,538 +21%

EBITA up 7%, although challenged by the execution problems in Material Handling

EBIT down 6%, adversely impacted by R&D impairment loss of DKK 188m

, ,Gross margin 24.5% 25.6%EBITA 2,502 2,347 +7%EBITA margin 10.1% 11.4%

by R&D impairment loss of DKK 188m and effects of purchase price allocations amounting to DKK -285m (2011: DKK -178m)

CFFO up 50% on 2011

EBIT 1,988 2,117 -6%EBIT margin 8.0% 10.3%Net results1) 1,303 1,437 -9%CFFO 1,720 1 148 +50%

12 February 2013 6

CFFO 1,720 1,148 +50%Employees2) 14,827 12,146 +22%

Annual Report 2012

1) Including Cembrit2) Excluding Cembrit

Annual Report 2012

Emerging markets 68% of revenue in 2012

Revenue 2012Revenue 2012 Revenue 2012– classified by geography

BRIC countries( l d Ch )

Revenue 2012 – classified by country category

Europe

10%10%

20%20%

25%25%Asia

21%21%32%32%

(Brazil, Russia, India, China)High-income countries(Cf. World Bank’s definition)

North America

20%20%16%16%

9%9%

Af i

Australia

47%47%

S h A iAfrica


Developing countries (Exclusive of BRIC)

South America

Annual Report 2012

Segment developments in 2012

EBITA 2012Revenue 2012 EBITA 2012– classified by segment

Revenue 2012 – classified by segment

Customer ServicesCement

28%28%16%16%

Customer Services

37% 40%

30%

19%19%37%37%

Material HandlingMineral Processing

-7%

Customer Material Mineral Cement


gServices Handling Processing

Ce e t

Annual Report 2012

Service accounts for ~40% of overall business

Revenue 2012 Order intake 2012 Revenue 2012 – classified by projects, products and Services

Order intake 2012 – classified by Service and Capital business

Service BusinessCapital Business

28%28%

49%49%Projects41%41%

p

Service Business37 %

9%9%

14%14%

59%59%37 %

Product companies23 %

Annual Report 2012 912 February 2013

Annual Report 2012

A d d i Q4 2012

Distribution of order intake by industryOrder intake 2012

classified by industry

21%

Announced orders in Q4 2012

Copper Kazakhstan DKK 369m (MP)

– classified by industry

CementOther

34%

8%

3%3%

21% Cement Russia DKK 200m (C)Copper Chile DKK 1.1bn (CS)Gold Russia DKK 200m (MP)

T t l DKK 1 869

Cement

Iron ore

Fertilizers

22%9%

8% Total DKK 1,869m

CopperGold

Coal


Annual Report 2012

Order intake increased 4% in Q4 2012Order intake (quarterly)

+4% vs Q4 2011DKKmOrder backlog (quarterly)

+9% Q4 2011DKKm Book to bill ratio*

4,000

6,000

8,000

10,000+4% vs. Q4 2011DKKm

1 101.201.301.401.501.60

15,00020,00025,00030,00035,000

+9% vs. Q4 2011DKKm Book-to-bill ratio*

Announced O&M ordersAnnounced capital ordersUnannounced orders

0

2,000

,

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

0.800.901.001.10

05,000

10,000,

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

*) O de backlog di ided b T ailing T el e Months Re en e

Two consecutive quarters with new O&M contracts

Announced orders stable around DKK ~2bn in Q4

Expected backlog conversion to revenue: 56% in 2013, 21% in 2014 and 23% in 2015 and

*) Order backlog divided by Trailing-Twelve-Months Revenue

p g ,beyond. O&M contracts accounted for DKK 5.1bn (17%) of the order backlog at the end of 2012


Annual Report 2012

Revenue increased 16% in Q4 2012Revenue (quarterly)+16% vs Q4 2011DKKm EBITA margin

EBITA (quarterly)4% Q4 2011DKKm

4,000

6,000

8,000

10,000+16% vs. Q4 2011DKKm EBITA margin

6%

9%

12%

15%

400

600

800

1,000-4% vs. Q4 2011DKKm

0

2,000

,

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

0%

3%

6%

0

200

400

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Record high revenue in Q4’12

Pattern of increasing quarterly revenue over the calendar year expected to be repeated in 2013

EBITA close to record but EBITA margin challenged by execution problems in Material HandlingEBITA close to record but EBITA margin challenged by execution problems in Material Handling


Annual Report 2012

Lowest SG&A ratio in 10 quarters

SG&A i d 0 6 % i Q4’11 SG&A (quarterly)

SG&A ratio down 0.6 %-points on Q4’11 and down 3.0%-points on Q3’12

In 2012, costs of non-recurring nature included in SG&A amounted to DKK ~225m:

SG&A ratio

12%

15%

18%

800

1,000

1,200+11% vs. Q4 2011DKKm

included in SG&A amounted to DKK 225m:Implementation of new strategy and organizationBusiness alignment related to development

6%

9%

12%

400

600

800

of global ERP business systemTransaction and integration costs in connection with acquisitions

0%

3%

0

200

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012


Annual Report 2012

Cost efficiency program

Primary focus areas:Primary focus areas:Global cost freeze to benefit from scale effectsImplementation of cost control regime in local entitiesIncreased use of shared services (across geographies and Increased use of shared services (across geographies and global functions)Simplification of legal structure (one legal entity per country)I t ti f i d titi d t ti f iIntegration of acquired entities and extraction of synergiesContinued transfer of cost base to cost competitive countries


Annual Report 2012

Cash flow from operating and investing activitiesCFFO (quarterly)

DKKmCFFI (quarterly)+4% vs Q4 2011DKKm+489% vs Q4 2011DKKm

800

1200

1600

+4% vs. Q4 2011DKKm

-1,200-600

0600

+489% vs. Q4 2011

-400

0

400

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

-3,000-2,400-1,8001,200

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Strong CFFO due to down payments and focused efforts on cash collection

CFFI back to a “normalised” level post the acquisition of Ludowici, Decanter and Teutrine and MIE Enterprises in Q3’12

Slow down in acquisitions in 2013


Annual Report 2012

Working capital management intensifiedWorking capital* (quarterly)

+22% Q4 2011Working capital increased 0.1%-points of sales vs. Q4’11 but decreased 4 2%-points of sales vs Q3’12 +22% vs. Q4 2011DKKmQ4 11 but decreased 4.2% points of sales vs. Q3 12

Structural reasons for increase in working capitalpersist:

Strategic initiatives in Customer Services 10%

12%

14%

2,500

3,000

3,500WC /TTM* Revenue

Ambition to cap WC/Revenue at 10%

Change in business mix towards more Customer Services, more mining products and projects and less cement projects (product companies account for 85% of total working capital compared to 23% of group 4%

6%

8%

1,000

1,500

2,000

,

revenue)

However, a working capital program has been initiated with the ambition to cap working capital at 10%-points of sales*

0%

2%

0

500

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012


*) Working capital excluding Cembrit

*) TTM : Trailing-Twelve-Months excluding Cembrit

*) This ambition may not withstand a significant future change in business mix

Annual Report 2012

Working capital program

Primary focus areas:Primary focus areas:

Establishing measurement and reporting of working capital on a business unit level

Definition of KPI’s and targets included in bonus Definition of KPI s and targets included in bonus schemes for 2013

Just-in-time inventory management

Cash collection of overdue debtors

Optimisation of supplier credit terms

Initiatives related to project cash flow management


Annual Report 2012

Historical growth and profit efficiencyRevenue (annually)

DKKmEBITA (annually)

DKKm EBITA marginCAGR 2006 2012: 14% M i 2007 2012 10 11%DKKm

8%10%12%14%

1 500

2,000

2,500

3,000

DKKm EBITA margin

40%

60%

80%

20,000

30,000

40,000

GrowthCAGR 2006-2012: 14% Margin 2007-2012: 10-11%

0%2%4%6%

0

500

1,000

1,500

2007 2008 2009 2010 2011 2012-20%

0%

20%

-10,000

0

10,000

2006 2007 2008 2009 2010 2011 2012

While, revenue has more than doubled in 6 years.. CAGR 14% since 2006 (CAGR excl. acquisitions 9%)

..and EBITA margins have been stable for 6 consecutive years.. i iEBITA margin ~10-11% since 2007


Annual Report 2012

Capital efficiency is top priority in 2013ROCE* (annually)Average

capital employed ROCE19% in 2012p p y

DKKm

30%

40%

50%

9,000

12,000

15,000

ROCE19% in 2012

ROCE = EBITA

Return on capital employed definition- calculated before tax and including goodwill- based on average capital employed

ROCE target

0%

10%

20%

0

3,000

6,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

ROCE = EBITA .Net working capital

+ Tangible assets (carrying amount)+ Intangible assets (cost price)

..Capital employed has increased notably due to acquisitions.. (DKK +7.7bn from 2007 to 2012)

..and therefore return on capital employed has fallen (From 44% in 2007 to 19% in 2012)

ROCE expectations: 15% in 2013 increasing in 2014 and exceeding target of >20% in 2015ROCE expectations: ~15% in 2013, increasing in 2014 and exceeding target of >20% in 2015


*) ROCE: Calculated on a before tax basis, including goodwill and based on average Capital Employed.

Annual Report 2012

Capital structureNIBD (quarterly)

DKKmEquity (quarterly)

DKKm Equity ratioGearing Gearing 1 1x EBITDA +6% Q4 2011DKKm

30%

40%

50%

6,000

8,000

10,000

DKKm Equity ratio

0.81.21.622.4

2,0003,0004,0005,0006,000

Gearing (NIBD/ TTM* EBITDA)

Gearing 1.1x EBITDA +6% vs. Q4 2011Equity ratio target (self-imposed)Gearing target (self-imposed)

0%

10%

20%

0

2,000

4,000

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

-0.8-0.400.40.8

-2,000-1,000

01,0002,000

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Net debt and gearing decreased in Q4 due to strong CFFO and no acquisitions

The equity ratio increased to 30%

Committed credit facilities amounted to DKK 7 8bn (excl mortgage) at the end of 2012Committed credit facilities amounted to DKK 7.8bn (excl. mortgage) at the end of 2012


*) TTM: Trailing-Twelve-Months

Annual Report 2012

Planned cash distribution of DKK 1bn

The Board of Directors plan for a total cash distribution of DKK 1bn in 2013 after the AGM 2013

Ordinary dividend: DKK 9 per share = DKK 479m

Extraordinary cash distribution in the form of a share buyback program: DKK 521m

The share buyback program will be subject to“Safe Harbour” rules“Safe Harbour” rules

The basis for the program is recent improvements in operating cash flow and expectations of a significant free cash flow in 2013 due to slow-


gdown in acquisitions

Annual Report 2012

Market trendsSatisfactory underlying demand and order intake

However installation of new capacity is challenged by However, installation of new capacity is challenged by lengthy permitting processes and investment budget overruns

Thermal coal prices remain low, whereas copper and gold continue to be attractive for capex investmentsgold continue to be attractive for capex investments

Iron ore and metallurgical coal prices are on the rise, driven by a rising demand for steel, especially from China

In Cement, good opportunities persist and the market for , g pp pnew capacity is expected to have bottomed out in 2012

Medium to long term prospects remain encouraging


Customer Services


Customer Services

Customer Services(DKKm) Q4 Q4 Change Change Expected(DKKm) Q

2012Q

2011 Change 2012 2011 Change p2013

Order intake 2,442 1,288 +90% 9,202 5,271 +75%

Order backlog 8,159 6,081 +34% 8,159 6,081 +34%

Revenue 2 129 1 551 +37% 7 073 5 259 +34% DKK 8-10bnRevenue 2,129 1,551 +37% 7,073 5,259 +34% DKK 8-10bn

EBITDA 317 260 +22% 1,012 882 +15%

EBITA 293 256 +14% 930 838 +11%

EBITA margin 13.8% 16.5% 13.1% 15.9% 13-15%

EBIT 259 255 +2% 7871) 832 -5%

EBIT margin 12.2% 16.4% 11.1%1) 15.8%

1) Including one-off write-down of capitalized R&D costs in Q2 of approximately DKK 60m


) g p pp y

Customer Services

Strong growth in order intake and revenueRevenue (quarterly)

DKKm EBITA margin+37% Q4 2011Order intake (quarterly)

+90% vs Q4 2011DKKm DKKm EBITA margin+37% vs. Q4 2011

8%

12%

16%

20%

1 000

1,500

2,000

2,500

2,000

3,000

4,000+90% vs. Q4 2011DKKm

Announced O&M ordersOrders (excl. announced O&M orders)

0%

4%

8%

0

500

1,000

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

0

1,000

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Strong order intake in Q4 reflects continued good market conditions and yet another O&M contract of DKK 1.1bn

Clear pattern of increasing quarterly revenue over the calendar year

Margin adversely impacted by ~1%-point in 2012 related to costs of one-off nature


Material Handling (previously Bulk Materials)


Material Handling

Material Handling(DKKm) Q4 Q4 Change Change Expected(DKKm) Q

2012Q

2011 Change 2012 2011 Change p2013

Order intake 675 1,232 -45% 4,565 5,491 -17%

Order backlog 4,773 5,145 -7% 4,773 5,145 -7%

Revenue 1 326 1 772 -25% 4 997 5 005 0% DKK 4-6bnRevenue 1,326 1,772 -25% 4,997 5,005 0% DKK 4-6bn

EBITDA -167 165 -140 276

EBITA -177 139 -186 225

EBITA margin -13.3% 7.8% -3.7% 4.5% >0%

EBIT -203 115 -247 146

EBIT margin -15.3% 6.5% -4.9% 2.9%


d d d i k d

Material Handling

Reduced order intake and revenueRevenue (quarterly)

DKKm EBITA margin25% Q4 2011Order intake (quarterly)

45% vs Q4 2011DKKm DKKm EBITA margin-25% vs. Q4 2011

1,000

1,500

2,000-45% vs. Q4 2011DKKm

0%5%10%15%

0600

1,2001,800

0

500

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

-15%-10%-5%

-1,800-1,200

-600

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Weaker short term market outlook for bulk materials

Prudent tender approach

Primary focus on improved operational excellencePrimary focus on improved operational excellence


Material Handling

Gradual recovery in Material Handling expected

Profitability in Material Handling has been negatively impacted by total unbudgeted costs of Profitability in Material Handling has been negatively impacted by total unbudgeted costs of DKK 450m in 2012. These costs are a combination of;

Realised costs

Provisions for expected future losses

Restoration of exhausted contingencies

A number of large contracts will run through the books with zero contribution margins in the coming 1-2 years

Management has undertaken all possible endeavours to ensure that all major project risks in the g p j p jcurrent backlog have been identified and accounted for in 2012Due to temporarily lower activity the division will lack operational gearing in 2013


Mineral Processing (previously Non-Ferrous)


Mineral Processing

Mineral Processing(DKKm) Q4 Q4 Change Change Expected(DKKm) Q

2012Q

2011 Change 2012 2011 Change p2013

Order intake 2,467 2,507 -2% 10,318 9,731 +6%

Order backlog 9,589 8,779 +9% 9,589 8,779 +9%

Revenue 3 358 2 503 +34% 9 512 6 766 +41% DKK 10-12bnRevenue 3,358 2,503 +34% 9,512 6,766 +41% DKK 10-12bn

EBITDA 483 362 +33% 1,079 859 +26%

EBITA 457 349 +31% 1,000 815 +23%

EBITA margin 13.6% 13.9% 10.5% 12.0% 8-10%

EBIT 426 316 +35% 7731) 689 +12%

EBIT margin 12.7% 12.6% 8.1%1) 10.2%



1) Including one off write down of capitalized R&D costs in Q2 of approximately DKK 60m

Mineral Processing

Stable order intake and strong revenue growthRevenue (quarterly)


2% vs Q4 2011DKKm DKKm EBITA margin+34% vs. Q3 2011

9%12%15%18%21%

1,5002,0002,5003,0003,500

1,5002,0002,5003,0003,500

-2% vs. Q4 2011DKKm

0%3%6%

0500

1,000,

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

0500

1,000

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Stable quarterly order intake

High revenue as a consequence of strong order intake in previous quarters

Satisfactory marginSatisfactory margin


Cement


Cement

Cement(DKKm) Q4 Q4 Change Change Expected(DKKm) Q

2012Q

2011 Change 2012 2011 Change p2013

Order intake 615 1,113 -45% 4,599 4,438 +4%

Order backlog 7,585 7,749 -2% 7,585 7,749 -2%

Revenue 1 498 1 333 +12% 4 214 4 354 -3% DKK 5-7bnRevenue 1,498 1,333 +12% 4,214 4,354 -3% DKK 5-7bn

EBITDA 317 232 +37% 788 541 +46%

EBITA 307 229 +34% 752 494 +52%

EBITA margin 20.5% 17.2% 17.8% 11.3% 6-8%

EBIT 304 221 +38% 6691) 475 +41%

EBIT margin 20.3% 16.6% 15.9%1)

10.9%



Cement

Weak order intake but solid order executionRevenue (quarterly)


45% vs Q4 2011DKKm

1000

1500

2000

2500DKKm EBITA margin+12% vs. Q4 2011

10%

15%

20%

25%

1000

1500

2000

2500-45% vs. Q4 2011DKKm

0

500

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

0%

5%

10%

0

500

1000

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Extraordinary high EBITA margin due to better than expected order execution and reversal of contingencies and provisions in connection with finalisation of projects taken in pre-crisis years

Trough margins expected in 2013, where markets are expected to start improving

Proposal activity remains high in many parts of the world, but decision-making is dragging out


Cement

Global contracted new kiln capacity (excl. China)

Million tonnes per year

Gl b l t t d 120

140

160

Global contracted new kiln capacity in 2012 ~40 mty(2011: 46 mty)60

80

100

0

20

40


0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Annual Report 2012

Cembrit sales process

Not part of FLSmidth’s long term strategy, and a sales process is on-going

Reported as discontinued activities

Sales process progressing according to planp p g g g p

The sales process is expected to be completed within 12 months from the announcement in August 2012, however FLSmidth cautions that there is no assurance that the process will in fact lead to a sale


Future Outlook


Future Outlook

Long term financial targetsFinancial targets

Annual revenue growth Above market averageEBITA margin 10-13%ROCE* (new) > 20%ROCE (new) > 20%Tax rate 32-34%Equity ratio >30%Financial gearing (NIBD/EBITDA) <2Financial gearing (NIBD/EBITDA) <2Pay-out ratio 30-50%

*) ROCE: Return on Capital Employed calculated on a before tax basis and including goodwill


Future Outlook

Group Guidance 2013 Actual 2012

R DKK 27 30b DKK 25b

Guidance 2013• Guidance is for continuing

activities (excl. Cembrit)Revenue DKK 27-30bn DKK 25bn

EBITA margin* 8-10% 10.1%

Tax rate 32-34% 34%

CFFI (incl. acquisitions, DKK 1b DKK 3 6b

• Effect of purchase price allocations expected to be ~DKK -320m in 2013 (2012: DKK -285m)

• Costs of non-recurring nature CFFI (incl. acquisitions, excl. disposals) ~DKK -1bn DKK -3.6bn

Segments Guidance 2013

R 2012 EBITA i 2012

*) EBITA margin: Includes an expected DKK 200m costs of one-off nature

gexpected to be ~DKK 200m in 2013 (2012: DKK 225m)

• CFFO and order intake expected to be satisfactory in 2013

Revenue 2012 EBITA margin 2012

Customer Services DKK 8-10bn (DKK 7.1bn) 13-15% (13.1%)

Material Handling DKK 4-6bn (DKK 5.0bn) >0% (-3.7%)

Mi l P i DKK 10 12b (DKK 9 5b ) 8 10% (10 5%)

• 2013 is expected to be the trough year in terms of EBITA margin

• ROCE is expected to be ~15% in


Mineral Processing DKK 10-12bn (DKK 9.5bn) 8-10% (10.5%)

Cement DKK 5-7bn (DKK 4.2bn) 6-8% (17.8%)

2013, increase in 2014 and to exceed 20% in 2015

CEO succession plan

Thomas Schulz to take up the position as Group CEO

CEO succession plan

Thomas Schulz to take up the position as Group CEO on 1 May 2013

47 years old and German citizen

MSc & PhD in Engineering with a dissertation in Mineral Mining and Quarrying

Employed by Sandvik (Svedala Industries) since 1998, most recently as President of ‘Construction’ and member of Sandvik's Executive Management Group

Jørgen Huno Rasmussen to retire in May 2013, 10 years after agreeing to join FLSmidth


Key take-aways2012 G id t d it l i M t i l H dli2012 Guidance met - despite losses in Material Handling

2013 Guidance – continued growth but trough year in terms of EBITA margin

ROCE target introduced and share buyback program planned g y p g p

2012 characterised by transformation and expansionFocus in 2013 will be on execution and consolidationFocus in 2013 will be on execution and consolidation


Questions &AAnswers

Next event: Annual General Meeting on 5 April 2013

Next update: Q1 Interim Report on 17 May 2013

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