KHD Corporate Presentation - 2013

Corporate Presentation

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KHD Humboldt Wedag

Company Overview

Industry & Market

Strategy for Success

Preparing for the future

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Our typical customers

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Local Global Regional

We are one KHD team committed to global

excellence as a customer-focused

equipment supplier and service company

providing competitive and environmentally

friendly technologies to the cement and

mining industries.

Mission

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KHD Offering

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• Full line engineering and equipment supply

• Individual machines

• Equipment packages

• Spare parts and a full range of plant services

KHD is one of the world‘s leading suppliers of cement plant equipment

• Over 150 years building new technologies, innovations, and high-end processes to meet

the global cement industry demand.

• Technology-focused company specializing in process engineering and project execution.

• Offers a wide range of products and services for the cement industry.

• High competence in eco-friendly and efficient products for pyro-processing and grinding.

• Over 760 employees worldwide.

• Presence in emerging markets like India and Russia / CIS, as well as in established

markets like USA , EMEA, and APA.

About Us

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• With KHD since 2008

• More than 25 years of experience in the

international construction and mining

equipment business

• Prior to joining KHD, was the President of

Construction Materials Division at Metso

Minerals, Inc.

• Bachelor of Science in Mechanical

Engineering from the Technical University

in Hameenlinna, Finland.

Our Executive Management Team

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Jouni Salo, CEO

• With KHD since the end of March 2011

• Previously the Assistant President of

Cement Business at CATIC Beijing Co.

Ltd.

• Has longstanding experience in working

abroad, as well as an MBA, and a degree

in Engineering

• Will develop global EPC business, as well

as KHD’s new customer service center in

the Asia-Pacific region

Yizhen “Mario” Zhu, COO

Operational Structure Beginning 2013

8 CSCs are supported by a global corporate and functional organization

CSC ASIA PACIFIC

KHD Beijing

CSC

INDIA

SSA

HWI Delhi

CSC

AMERICAS

HW INC

Atlanta

Belo Horizonte

Global

Headquarters

Cologne

Special

Markets

CSC

RUSSIA

ZAB Dessau

OOO Moscow

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KHD Operational Management Team

G. Harrison

Vice President -

Project Execution

J. Eloranta

Vice President -

Technology & Products

P. Ringberg

Vice President -

Contract Management

J. Luckas

Vice President -

Governance Risk &

Compliance

D. Uttelbach

Vice President -

Account Management

C. Elliger

CSC Head, RUS/CIS

Y. Zhu

CSC Head, APA R. Cusick

CSC Head, Americas

M. Gierse

CSC Head, India

J. Salo

Chief Executive Officer

Y. Zhu

Chief Operating Officer

Innovation is deeply ingrained in the name

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The “K” in KHD comes from

Peter Klöckner. In the 1920s,

Peter Klöckner created an

industrial conglomerate known

as Klöckner-Humboldt-Deutz

AG, by joining Klöckner Steel

works, with Humboldt Industrial

Plants, and Deutz Motor Works.

Since then, strategic

partnerships have continued to

played a key role in KHD’s

history.

The cement division derives its

name from the original

Humboldt Industrial Plants,

which were named after one of

the most famous German

scientists and explorers,

Alexander von Humboldt. His

work changed the mining

industry, and his spirit of

innovation has shaped KHD for

over 155 years.

The “D” in KHD comes from the

famous Deutz Motor Works.

This company was founded in

the Cologne city section known

as Deutz. Deutz Motor Works

was the first company in the

world to mass produce the

gasoline engine developed by

Nikolaus Otto.

Peter Klöckner

(1863 -1940)

Alexander von Humboldt

(1769 – 1859)

Deutz Motor Company

Ad 1910

K H D

KHD Milestones


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• KHD built the world’s first pre-

heater in 1952

• The new preheater offered:

• Flexibility

• Low waste gas temperature

• High dust separation

efficiency

• Low power demand

• Today, KHD is still recognized

as industrial leader

• High calcination rate

• Lower NOx-emission due to

no build up of Thermal NOx

at the PYROCLON

• Modular Set-Up e.g.

Combustion Chamber

• Processes alternative fuels

• Complete Burn-Out

• Ratio Ø: length = 1: 11 – 12

• Pre-calcination 95%

• Increased production

• KHD was one of the first

companies to develop the

short kiln

• Lower construction costs

associated with only two piers

Preheater PYROCLON® Calciner PYRORAPID® 2-pier Kiln


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• Low energy consumption

• Low maintenance requirements

• Low space requirements

• Low vibration and noise

• High availability ( >95% )

• High wear surface life

• Modular, compact, all-around grinding system

• Lower energy requirements

• Low maintenance requirements

• Suitable for abrasive materials

• Excellent, local, after sales services for spare parts and replacement of wear parts

• Supervision Services

• Audits for:

• Process functions

• Mechanical Equipment

• Electric and Automation

• Quality and Chemistry

• Environmental matters

COMFLEX® System Roller Press Customer Service

Overview Financials

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Order backlog and order intake (backlog at end of period) in € million

215.2

282.9293.7

432.6

0

100

200

300

400

500

Q3/2011 YE 2011 Q3/2012

Order Intake Order Backlog

165.6

144.0

0

20

40

60

80

100

120

140

160

Q3/2011 Q3/2012

Group revenue

in € million

KHD Humboldt Wedag

Company Overview

Industry & Market



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• Since it is the main ingredient in concrete, after water, cement is the 2nd most widely used resource in

the world.

• Infrastructure projects drive demand for cement.

• The main ingredient in cement is limestone.

• The cement industry accounts for approximately 5% of the worlds CO2 emmissions.

• Although some cement and clinker (intermediate product of cement) is traded, most cement is produced

for local consumption.

• There are different grades and quality of cement.

• The basic process for making cement has not undergone any revolutionary changes in decades.

Basic Facts

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Our Market

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• Worldwide, there are 2,295 modern Cement Plants,

including 800 in China.

• Global consumption is expected to increase by 6%

in 2012 and 2013.

• Long Term Scenario for returns:

• Political intervention to cap cement prices

• Strong growth in emerging countries

encouraged new entrants into the market

• The pace of capacity addition is slowing in

China, but over 100 mt of new capacity will

be added annually between now and 2015

• Low utilization rates

• Trade flows have slowed during the crisis

and are now mostly intra-regional

Global cement consumption: over 3.5 bn tons Global Cement Consumption

Global Cement Production Capacity

0

500

1000

1500

2000

2500

3000

3500

4000 1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

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2007

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2010

2011

mill

ion tonnes

China Consumption

RoW Consumption

3564 m. t. in 2011

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1990

1991

1992

1993

1994

1995

1996

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1998

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2011

mil

lio

n to

nn

es

China Capacity

RoW Capacity

4225 m. t. in 2011

China: 57.2%

India: 5.7%

USA: 2.0%

Brazil: 1.8%

Russia: 1.5%

RoW: 31.8%

Source: Global Cement Volume Forecast Report: 1H2012 update , Exane BNP Paribas, March 2012

Our Market

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Global Cement Consumption Forecast ‘00 – ‘15

Source: Exane BNP Paribas, March 2012

Theoretical Utilisation Rate ‘00 – ‘15

2000 2011 2015e

Africa 81% 70 % 55 %

Latam 54 % 62 % 65 %

N America 103 % 65 % 65 %

Europe 60 % 57 % 54 %

Asia ex China 64 % 62 % 64 %

China 41 % 83 % 103 %

Middle East 61 % 76 % 77 %

Oceania 81 % 80 % 76 %

World 54 % 73 % 81 %

World ex Ch 65 % 63 % 62 %

• China’s cement consumption in 2011 was over 2 billion

tonnes or roughly 58% of total global consumption and likely

to continue for the immediate future albeit at a slower pace

in 2012 and 2013 to 7% and 6% resp.

• Cement consumption forecast for mature market regions

(North America & Western Europe) over the next two years

currently show modest (1-2%) growth prospect

• Average global cement consumption expected to increase

by 6% in 2012 and 2013 0

500

1000

1500

2000

2500

3000

3500

4000

2008 2009 2010 2011 2012 2013

mill

ion tonnes

Global Consumption Forecast (‘08 – ‘13)

China Consumption

RoW Consumption

Source: Global Cement Volume Forecast Report: 1H2012 update

Our Market Presence

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>185

North and

South America

Europe

Africa

Asia

326

10

85

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KHD has built over 500 cement plants across the world

Installed Base

KHD employees

Russia

308 India

1

2

>140

>150

>110

>80

>28

>28

KHD Humboldt Wedag

Company Overview

Industry & Market



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KHD Strategy for Success

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Customer-focused growth (I): Account management

covers all sectors of the market

22 *Note: All numbers excluding China

High Risk Countries

14%

5%

6%

7%

13%

3%

43%

• Regional cement companies

• Small, local cement companies

• Government owned cement plants

• Minor players

< 9%

Major Players: 48%

Total Global Capacity 1.500 mt/ p.a. *

Other Players: 52%

http://www.lafarge.com/

• Customer Service Centers (CSCs)

• New CSC Asia-Pacific strengthens market position in China and other Asian growth markets

• New sales offices in key regions Turkey, Saudi Arabia, and Brazil

• Stronger position in Russia after buyout of KHD OOO

• Intensified service activities

• Active marketing

Customer-focused growth (II): Taking the global view

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Increased tendering

activities

Strengthened customer

services and sales

Customer-focused growth (III): Advanced

technology-based services

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• Focused services, in line with technological core competence, add to our asset-light

business model

• New roller-press refurbishment center near New Delhi strengthens customer relationships

• In discussions with possible strategic partners

• CRM system established, group-wide roll-out in 2012

1 2

4 3

Technical Leadership

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• 40 patents in 2011

• KHD COMFLEX® system is one of the most energy-efficient grinding processes

• KHD’s COMBUSTION CHAMBER wins award for ‘Most innovative technology for

alternative fuels use’ at the 6th Global CemFuels Conference (Feb. 12)

• Industry leader in calcining technology with low NOX

• Highly efficient equipment helps reduce CO2

Strategic partnerships: AVIC

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• AVIC International Beijing Co. Ltd. and KHD Humboldt Wedag International AG agreed in December

2010 to join forces

• Long-term exclusive partnership

• Combines AVIC‘s EPC experience and access to low-cost sourcing, with KHD process know-how

and core product technology

• AVIC has invested a 20% stake in KHD

• Agreement became effective in March 2011

• Procurement center, established in 2011, helps to exploit cost advantages of Chinese supply market

Strategic partnerships: AVIC

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By combining the best of East and West, customers have a differentiated EPC option for

Cement Plant Projects with focus on emerging markets.

• Technical leader with core equipment

• Customer Service Centers around the globe

• Strong financial background

• EPC expertise in the cement sector

• Access to projects in China

• Low-cost sourcing

Strategic partnerships: Weir Minerals

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• Exclusive, global long-term sales agreement with Weir Minerals to grow KHD’s market share in the

minerals sector.

• Weir Minerals and KHD complement one another very well. KHD’s HPGR (roller press for minerals)

product is becoming increasingly accepted for minerals applications. However local service is

becoming more and more of a requirement for selling capital equipment in the minerals sector.

• Weir Minerals has access to the main minerals customers and a strong sales and service network

in all the major mining markets, as well as a strategic interest to develop other products.

Win-Win situation for both companies

Head Office: Glasgow

Listed: London Stock Exchange

Branches: Worldwide

Employees: > 9,000

The company constructs and

develops equipment for the mining,

processing industry with strong

service focus.

WEIR Group Company Profile Core Competencies:

Operational Excellence and Commitment

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• True international team = One KHD

• Group-wide emphasis on customer and service orientation, underlined by new

management structure

• Regular exchange of information and ideas

• Standardizing processes using SAP and CRM system

• Performance-based remuneration takes into account customer and service-related KPIs

KHD Humboldt Wedag

Company Overview

Industry & Market



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Future trends in our industry

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• Growth will be driven by emerging markets

• The BRIC countries will account for 80% of future growth

• Service business will become increasingly important

• Decision making will continue to be driven by environmental requirements and cost cutting

• Chinese competition is looking at growth opportunities outside of China, including

acquisitions in Europe

KHD India team supports a stronger future for local children

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Sweccha campaign:

• Provides local children guidance in life skills, values, attitudes and self esteem

• Creates awareness on environmental issues with projects such as Monsoon Wooding – An

effort to plant trees across Delhi, and establishing partner communities to care for their growth

• Offers children a place to go after school with programs in the areas of remedial courses, sports,

media, photography, dance and fun activities

• Organizes concerts and cultural events

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CEMENTING A

STRONGER FUTURE

Thank You

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