Capital Market Day 2014

Cement DivisionPer Mejnert Kristensen, Group EVP

1

Per Mejnert Kristensen, Group EVP Cement Group EVP, Cement Division, since March 2012 FLSmidth since 1992:

Vice President, Head of Project Division EMEA/APAC, FLSmidth

Vice President, Head of Project Division 1, FLSmidth

General Manager, FLSmidth China Chief Representative, Thailand, FLSmidth

MSc (Mechanical Engineering), Bachelor of Commerce degree, International Trade, Graduate Diploma (Bus. Admin.), International Trade, GMP, CEDEP (INSEAD)

Born 1967, Danish

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The Cement Division in brief

Development, design and installation of premium main equipment and full flow-sheet engineering solutions for cement plants

Regional centres in Denmark, USA and India

FLSmidth has delivered more cement plants in the world than anyone else

Employees: ~1,300

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0

1

2

3

4

5

-5

0

5

10

15

20%

Revenue (BDKK)

2012

3.4

2013

4.4

2014Q1-Q3

2.4

Future

EBITA%

Revenue EBITA%

Fundamentals of the Cement Division

Our excellence: Best in class in risk and project management combined with full scope supply of sustainable cement technologies

Strategic focus: While harvesting on our superior competencies in delivering EP contracts (engineering & procurement), we will increase focus on:

EPC contracts (engineering, procurement and construction) – in partnership with reliable and competitive ‘C’ providers (construction)

Engineered single equipment and upgrade projects

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Cement consumption will continue to grow in the future

0

1,000

2,000

3,000

4,000

5,000

6,000

1920 1940 1960 1980 2000 2020

Worst

Best

Most likely

Glo

bal c

emen

t co

nsum

ptio

n (M

TPA)

Source: Global Cement Top 100 Report, 2014

Drivers: Economic growth GDP per capita Population growth Investments in

infrastructure Urbanisation Industrialisation

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Order intake growth expected in 2015

AngolaBrazil

Colombia

Egypt

IndiaIndonesia

Iran

Kenya

Mexico

Nigeria

RussiaVietnam

0

100

200

300

400

500

600

700

800

900

1.000

0 10 20 30 40 50 60

Con

sum

ptio

n pe

r ca

pita

(kg

)

GDP per capita (2013 kUSD)

China(1,600 kg/cap)

Saudi Arabia, Oman, UAE

(1,475 - 1,955 kg/cap)

Continued cement growth inemerging markets

Emerging marketsUrbanisation and industrialisation

Mature marketsEconomy matures

Source: Global Cement Report, 10th edition, International Cement Review; FLSmidth analysis

Despite over capacity in some markets, there is under capacity in others, creating a large need for more cement capacity in the coming years.

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0 10k 20k 30k 40k 50k 60kGDP per capita 2013 (USD)

Our Vision and ambition

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Our vision:Be our customers’ preferred full-service provider of sustainable cement technologies

Our ambition: Financials:

3-5% annual revenue growth over the cycle 3-8% EBITA over the cycle Maintain positive cash flow and negative NWC

throughout project execution

Products

Projects, products and services are interconnected

Projects

Services

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Regional opportunities

North America• Environmental

requirements(NESHAP)

• EP & EPC projects & upgrades

Central & South America• Product sales, • EP and EPC

projects

IndiaProduct and project sales

Africa & Middle EastEPC projects combined with O&M

Russia & CISEP projects combined with (light) O&M

EuropeUpgrades and productivity improvements

Southeast Asia• EP & EPC projects• Product sales

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ChinaProducts and technologies for environmental protection and energy efficiency

Best in class project management and risk control capabilities

Offering a complete and flexible solution: EP projects, EPC projects, products and upgrades

Ability to offer combined EPC & O&M (Design, Build, Operate)

Global reach with local presence

Most reliable cement plants & upgrades

Process knowledge and emissions control

Strong focus on R&D ensuring efficient products at competitive prices

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Our unique competencies

The largest cement R&D centerProduct and technology innovation & testing

We work on… Applied research to acquire new

knowledge, later translated into sellable solutions

Continuous development of new equipment and processes

Improvement of our existing solutions

… with special focus on… Productivity improvement Decreasing energy consumption Reducing emissions Increasing usage of alternative fuels

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We facilitate financing

FLSmidth cooperates with international financial institutions and banks, including the Danish Export Credit Agency (EKF), capable of financing cement projects worldwide.

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Design, Build and OperateMinimising risks and increasing return for customers

Tailor-made design of the complete plant

EPC solution in partnership with an experienced construction company

O&M guarantees high performance from take-over

Ramlaya, Egypt

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All you need is…

“…and Customers to purchase your guaranteed cement production”

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Raw materials

Permissions

The Cement Division: Key takeaways

Offering all from complete projects to individual products and upgrades

Increased focus on EPC while mitigating the risks, and harvesting on our superior EP competencies

Increased focus on product and upgrade sales

Sales lead for the Product Companies

‘Partner’ with the Customer Services Division to offer a combined Design, Build and Operate value proposition as well as ensure future spares and service sales

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