FLS Industries A/S - Interim report 1 January - 31 March 2003

The FLS Industries A/S Board of Directors has today reviewed and adopted the Interim Report for January to March 2003. The Report is unaudited and presented in accordance with the same accounting policies as the 2002 Annual Report.

The full report is accessible via the Internet at

http://www.flsmidth.com/f.l.smidth/English/Investor+Relations/Reports/default.htm

The main conclusions are as follows:

FLS Group overall:
- Earnings before tax (EBT) amounted to DKK 532m as against DKK -58m for the same period last year

- The FLS Group's total earnings before interest and tax (EBIT) were DKK -101m compared to DKK -24m in 2002. Net of non-recurring income, the financial result is on a par with last year's level

- Cash flow from operating activities at DKK 118m (DKK 210m) is considerably higher than expected. FLS miljø posted a substantial negative cash flow as anticipated

- The FLS Group's interest-bearing debt amounts to approximately DKK 1.7bn (2002: DKK 4.8bn)

Core activities:
- The FLS Group's core activities organised within F.L.Smidth Group and FLS Building Materials posted total earnings before interest and tax (EBIT) at DKK -51m (DKK 49m). Net of non-recurring income, this amount is DKK 47m lower than for the same period of 2002

- Operating in a squeezed market, F.L.Smidth Group recorded a gratifying flow of orders at DKK 2.7bn. Turnover within the core activities reached DKK 2.3bn, F.L.Smidth Group accounting for DKK 1.6bn and FLS Building Materials DKK 0.7bn

- The core activities recorded a positive cash flow at DKK 315m as against DKK -107m in the same period the year before.

Other activities:
- In March the Group sold its interests in Secil at a price of DKK 1,150m

- FLS Aerospace posted earnings (EBIT) of DKK 22m for the first three months of 2003. This is a satisfactory result, on a par with that for the same period of 2002

- FLS miljø is proceeding with the completion of a desulphurisation project in the UK. The project is now nearly 90% finished. An additional DKK 50m provision has been made for project processing costs, and the company therefore posted earnings before interest and tax at DKK -56m.

Prospects for the overall FLS Group in 2003:
- The FLS Group anticipates a consolidated turnover of around DKK 15bn provided that its main currencies, USD and GBP, remain at their current exchange rate level

- The FLS Group maintains its projection of earnings before interest and tax (EBIT) around the level of DKK 300 - 400m

- The FLS Group maintains its forecast of earnings before tax (EBT) at DKK 250-350m exclusive of the effect of acquisition and disposal of undertakings

- The FLS Group expects its net debt at the end of the year to be around DKK 2.2bn including the divestments that have taken place until today. The net debt includes approximately DKK 250m deriving from the Group's white cement operations in Egypt because the second quarter saw the start of a process to give FLS a majority stake in the company which will then become a wholly-owned and fully consolidated Group undertaking. The debt is financed by the Egyptian company through local sources

Prospects for core activities in 2003:
- The core activities within F.L.Smidth Group and FLS Building Materials maintain their projection of an EBIT result around DKK 0.5bn in 2003

Prospects for other activities in 2003:
- FLS miljø expects much improved earnings before interest and tax compared to 2002, although the completion of a desulphurisation plant in the UK continues to pose risks

- FLS Aerospace maintains its forecast of much improved earnings before interest and tax compared to 2002

The earnings forecast is subject to particular uncertainty with regard to the prospects of the non-strategic activities. The FLS Group's focusing strategy includes a number of corporate divestments. The results, the sequence and the timing of these divestments may significantly affect the prospects, both positively and negatively, and are not included in the above figures.

FLS Industries A/S
Corporate Public Relations