Bulk Material

Bulk Materials
Group Executive Vice President Carsten R. Lund
FLSmidth Mining Insights, Las Vegas, 26 September 2012 1

Agenda
Agenda
Bulk Materials Division

- insights and offerings
Market and perspective
Strategy and perspective

Bulk Materials Division in brief …
Bulk Materials Division brings to FLSmidth the

complete range of materials handling
technologies that will allow our customers to:
Convey raw and bulk materials
Provide stacking, blending, storage and
stockyard management
Port facilities for import and export of bulk
material
Bulk materials primarily include
Coal, iron ore, fertilizer minerals and cement
But global customer base in all six focus

industries
Global presence with 3,350 employees
Consolidated revenue of DKK 5bn 2011

Bulk Materials Division in brief …
Division consists of:

Project unit
Several former product companies
consolidated into Bulk Materials Handling
Product units
Automation (process control & electrification)
Airtech (Air Pollution Control)
FLSmidth MAAG (drive solutions & gear technology)

Insights and offerings
Flow sheet applications for Bulk Materials Handling

Conveying

Conveying
Solutions:
In Pit conveyors
Overland conveyors
In Plant conveyors
Products
Belt conveyors
Pipe conveyors
Apron and belt feeders
Drag Chains
Others


Stockyard management

Stockyard management
Solutions:
Stacking (Circular, longitudinal, etc.)
Blending (do)
Reclaiming
Tailings systems
Products:
Portable conveyors
Bucket wheel stacker & reclaimers
Portal scraper claimer
Train loading – unloading units
Fully Mobile stacking / reclaiming equip.
Bridged conveyer
Others FLSmidth Mining Insights, Las Vegas, 26 September 2012 8

Port facilities for import/export

Port facilities for import/export

Solutions:
Ship Loaders (fixed / travelling)
Ship Unloaders (continuous / discontinues)
Transfer systems
Products:
Pneumatic ship loaders
Screw & Bucket unloaders
Grab unloaders
Conveying systems
others


In-Pit Crushing and Conveying (IPCC)

In-pit Crushing and Conveying (IPCC)

Replaces partially or completely truck transport with belt conveyors
Solutions:
IPCC (In-Pit Crushing and Conveying)
OPCC (Crushing along pit rim or close proximity
of pit)
Waste Stacking
Conveying of product to plant
Fully mobile or Semi mobile
Advantages:
- lower cost
- lower power consumption
- less pollution, lower CO2 emissions

Flow sheet application according to industry

Automation and Control

Blend Control Volume Control
Automized
Laboratory
ECS/ACESYS
Control System
● SAMPLING & MEASURE ● ANALYZE ● CONTROL ● ADJUST Process & Quality

Automation and control systems

Complete sampling equipment
Automated Lap solutions
Equipment for iron ore loading station, Rio Tinto, Australia Process Control solutions
Optimized transport solution

Environmental control
Lowering our clients Power Consumption and
Environmental impact by;
Mitigating Fugitive emissions via dust
suppression systems
Reducing Transfer Station emissions by custom
designed environmental control equipment
Low environmental impact via product
development targeting lower power consumption
Reducing General plant emissions via Air
Pollution Control Business Unit


Market outlook is positiv medium to long term
Coal and iron ore seem to be the most impacted commodities in the short
term due to apparently slowing growth in China and declining demand for
coal in the USA related to shale gas development. Impacting some larger
CapEx projects.
However, potentially increasing export/import of coal will increase
demand for materials handling equipment
Also significant MH projects within Fertiliser and Cement
The long term positive outlook for Bulk Materials Handling is intact and is
expected to be fuelled by continued urbanisation and electrification of
emerging markets

Large structural demand for Materials Handling

equipment
As ore grades of mined materials continue to decline, the quantities to be
moved and processed increase rapidly
As ore deposits become less accessible, typically more overburden
material has to be removed to get down to the ore body
Bulk materials are often exported and imported in large quantities,
requiring additional material handling equipment at both ends.
FLSmidth offers large scale, customised, integrated and energy-efficient
material handling solutions which is a modern, economic and
environmentally sustainable alternative to traditional conveying
methods (such as trucks) requiring less man-power and fuel

Bulk Materials Handling face execution challenges

and modest order intake
Revenue (quarterly) Order intake (quarterly)
DKKm
DKKm
+19% vs. Q2 2011 EBITA margin +1% vs. Q2 2011
2.000 16,0% 2.000
1.500 12,0% 1.500

1.000 8,0%
1.000
500 4,0%
500
0 0,0%
-500 -4,0% 0
Q2 03 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 03 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2010 2010 2010 2011 2011 2011 2011 2012 2012 2010 2010 2010 2011 2011 2011 2011 2012 2012
As reported at Q2;
Slightly weakening profit outlook for Bulk Materials in the short term
Prudent tender approach and resulting modest order intake, but encouraging hotlist

Tight focus on execution challenges in Bulk Materials

Bulk Materials Handling business facing challenges related to difficulties
in project execution...
..stemming from underestimated risks in connection with orders
received in previous years...
..combined with lack of timely handling and mitigation hereof
A number of initiatives have been put in place, explained in the following

slides
Based on the new management’s assessments, expectations to

profitability in 2012 were in august changed from “Stable” to
“Decreasing” relative to last year’s EBITA margin of 4.5%


Key initiatives to strengthen Bulk Materials Handling

- short-term focus areas
1
Stabilise
2
ENSURE PREDICTABILITY
Optimise
Utililse

Key initiatives to strengthen Bulk Materials Handling

- short-term focus areas
1 Increased focus on global project risk reporting and monitoring
Global Project Review Board established
Best Practice sharing for EPC Contract Management
Stabilise
Improved Site Management and support; Global Sited Director started
Newer contracts review and timely action
ENSURING PREDICTABILITY !
2 Strengthening the BMH organization; unification & globalization
Enforced alignment; New Head of Bulk Material Handling EMENA
Optimise Consolidation ; the BMH units in North America are now one unit
Unification; creating clearer Profit /Loss responsibility
3 Strengthen sales staff & sales management

Develop truly global proposal team and sales coordination
Utililse Balance the contract types in the order intake – reduce backlog risk
“Be tough” - executing on the policies
Utilize FLSmidth coverage and Bulk Material Handling global capabilities

Key initiatives to grow Bulk Materials Handling

- long-term strategic focus areas
1
Strengthen footprint in several key markets
Customer Execute industry strategies
Intimacy Leverage other FLSmidth divisions
Enable One Source offering in all key industries
2 Continue to improve business procedures

Operational Establish EPC capabilities in key markets
Ensure well established & supported Global product portfolio
Excellence Further utilization of Chennai engineering
Continue to expand Global sourcing
3
Closer cooperation with customers to understand future needs
Product Focus on product development and leverage Intellectual Property Rights
Allocate the necessary resources to support innovation
Leadership
Acquire technology/ process know-how

Questions

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Bulk Materials

Group Executive Vice President Carsten R. Lund

FLSmidth Mining Insights, Las Vegas, 26 September 2012 1

 Bulk Materials Division

 Market and perspective

 Strategy and perspective

FLSmidth Mining Insights, Las Vegas, 26 September 2012 2

Bulk Materials Division in brief …

 Bulk Materials Division brings to FLSmidth the

 But global customer base in all six focus

FLSmidth Mining Insights, Las Vegas, 26 September 2012 3

Bulk Materials Division in brief …

 Division consists of:

 Airtech (Air Pollution Control)

 FLSmidth MAAG (drive solutions & gear technology)

FLSmidth Mining Insights, Las Vegas, 26 September 2012 4

Flow sheet applications for Bulk Materials Handling

FLSmidth Mining Insights, Las Vegas, 26 September 2012 5

FLSmidth Mining Insights, Las Vegas, 26 September 2012 6

Flow sheet applications for Bulk Materials Handling

FLSmidth Mining Insights, Las Vegas, 26 September 2012 7

Flow sheet applications for Bulk Materials Handling

FLSmidth Mining Insights, Las Vegas, 26 September 2012 9

Port facilities for import/export

FLSmidth Mining Insights, Las Vegas, 26 September 2012 10

Flow sheet applications for Bulk Materials Handling

FLSmidth Mining Insights, Las Vegas, 26 September 2012 11

In-pit Crushing and Conveying (IPCC)

FLSmidth Mining Insights, Las Vegas, 26 September 2012 12

Flow sheet application according to industry

FLSmidth Mining Insights, Las Vegas, 26 September 2012 13

Automation and Control

● SAMPLING & MEASURE ● ANALYZE ● CONTROL ● ADJUST Process & Quality

Automation and control systems 

FLSmidth Mining Insights, Las Vegas, 26 September 2012 15

FLSmidth Mining Insights, Las Vegas, 26 September 2012 16

FLSmidth Mining Insights, Las Vegas, 26 September 2012 17

Market outlook is positiv medium to long term

FLSmidth Mining Insights, Las Vegas, 26 September 2012 18

Large structural demand for Materials Handling

FLSmidth Mining Insights, Las Vegas, 26 September 2012 19

Bulk Materials Handling face execution challenges

1.500 12,0% 1.500

FLSmidth Mining Insights, Las Vegas, 26 September 2012 20

Tight focus on execution challenges in Bulk Materials

 A number of initiatives have been put in place, explained in the following

 Based on the new management’s assessments, expectations to

FLSmidth Mining Insights, Las Vegas, 26 September 2012 21

FLSmidth Mining Insights, Las Vegas, 26 September 2012 22

Key initiatives to strengthen Bulk Materials Handling

FLSmidth Mining Insights, Las Vegas, 26 September 2012 23

Key initiatives to strengthen Bulk Materials Handling

3  Strengthen sales staff & sales management

FLSmidth Mining Insights, Las Vegas, 26 September 2012 24

Key initiatives to grow Bulk Materials Handling

2  Continue to improve business procedures

FLSmidth Mining Insights, Las Vegas, 26 September 2012 25

FLSmidth Mining Insights, Las Vegas, 26 September 2012 26

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Bulk Materials Division

Market and perspective

Strategy and perspective

Bulk Materials Division brings to FLSmidth the

But global customer base in all six focus

Division consists of:

Airtech (Air Pollution Control)

FLSmidth MAAG (drive solutions & gear technology)

Automation and control systems

A number of initiatives have been put in place, explained in the following

Based on the new management’s assessments, expectations to

3 Strengthen sales staff & sales management

2 Continue to improve business procedures