The FLS Industries Group's strategic plan of August 2002, which entailed divestment of activities outside the Group's two core areas, F.L.Smidth Group and FLS Building Materials, has essentially been completed in accordance with schedule.
On this basis FLS Industries has decided to initiate the next phase of the focusing process and the ongoing development of the Group.
As the first step towards further focusing, an administrative integration of the parent company, FLS Industries A/S, and F.L.Smidth A/S has been decided. A future legal merger of the two companies - with the listed company FLS Industries as the continuing company - will be considered. The purpose of the integration, which will take immediate effect, is to create a forward-looking structure based on short and efficient lines of decision-making adapted to the future organisation and the future level of activity.
In this context, the FLS Industries Board of Directors will also be elected Board of Directors for F.L.Smidth A/S. Moreover, effective 1 February, the FLS Industries and F.L.Smidth Group administrative functions within Finance, Business Control, Human Resources and IT will be integrated under the overall management of Mr Poul Erik Tofte, Group Chief Financial Officer.
It has also been decided to streamline the managerial structure at Board level, and the Group Management will therefore join the boards of directors of the subsidiaries within F.L.Smidth Group and FLS Building Materials, replacing the present external members of these boards.
As a consequence of the structural changes in the organisation, Mr Frank Gad, CEO, will leave his positions in the Group. Mr Jørgen Huno Rasmussen, Group Chief Executive Officer, will take over as new CEO of F.L.Smidth A/S and will be in charge of the day-to-day management of the company together with its existing management team, Mr Søren Iversen Executive Vice President, and Mr Christian Jepsen Executive Vice President.
The FLS Industries Group Management will thus in future consist of Mr Jørgen Huno Rasmussen, Group CEO; Mr Poul Erik Tofte, Group CFO; and Mr Bjarne Moltke Hansen, Group Executive Vice President.
As previously announced the Group will publish the 2003 Annual Report on 4 March 2004. Within FLS miljø, implementation of the two desulphurisation projects in the UK is largely on track, although with a larger workforce than originally foreseen. The West Burton project has gone into production, and the final
handing-over to the customer is expected to take place during the second quarter. Progress of the Eggborough project is delayed, but handing-over to the customer is still planned for the third quarter. This will mean the final phasing out of FLS miljø's activities. In connection with the release of the 2003 Annual Report an additional provision is to be expected. The precise amount of the provision will be assessed after the current contractual relations, the present situation of the project and the future risks have been closely reviewed.
As to the sale of FLS Aerospace, exclusive negotiations with one potential buyer are proceeding. In the closing stages a few issues have proved more time-consuming than anticipated, but a final conclusion is expected in the near future.
On announcing the new structure, Group CEO Jørgen Huno Rasmussen commented as follows:
"The changes decided will streamline the Group structure and make it more efficient, with a clear division of responsibilities and short lines of communication, which will contribute to stronger focus on realising the Group's values. We have chosen to take these steps now that phasing out of the Group's non-core activities is virtually completed and all resources can be concentrated on more forward-looking activities.
I look forward to working with the Group's many competent and experienced employees in achieving higher levels of profitability and continuing the development of activities, which the Group has every possibility of achieving through its international competence, leading market position and long standing customer relations."
FLS Industries A/S
Corporate Public Relations