Message from CEO

Dear stakeholders,
With a new chapter in the history of KHD, I would like to use the opportunity to introduce a renewed commitment to communicating with all our stakeholders and to do this on a regular basis via our website. We have also set ourselves the goal of further improving our internal and external communication in 2010.

This quarter I am pleased to report our full year results for 2009 of the KHD Group as well as the successful split of KHD into two entities. This leaves KHD focused on its core business of serving our customers with the supply, and service, of equipment and technology.

For the total group^1,2, KHD reported revenues in 2009 of $576.4m and an underlying operating income of $57.7m. This was a good result in difficult market conditions. Mature markets such as North America were particularly hard hit by the dramatic slowdown in construction activity in 2009 but there were strong pockets of activity in regions such as India. We were pleased to see new order intake improve in the second half of the year and this gives us confidence going into 2010.

I would like to thank our customers for their trust in this difficult period and would like also to underline our commitment to understand and serve customers even better in the future.

Outlook
From a new order intake perspective, we have seen a significant improvement in the second half of 2009, which gives us some confidence going into 2010 and 2011. India continues to be a good market for KHD and we intend to continue to strengthen our competitive position in this market. There are also tentative signs of an improvement in the Russian market, which accounts for almost half of our order backlog.

We intend to continue to invest in improving our technology as well as our offering of environmentally friendly products. This is likely to be achieved through a combination of internal research and development as well as through strategic partnerships. We are currently involved in a number of discussions with potential partners to strengthen our market position and are reviewing the effectiveness and efficiency of our product portfolio.

After a difficult start to 2009, we ended the year with renewed confidence and believe that we have taken a number of significant steps towards helping our customers produce cement and process minerals in a much more energy efficient and environmentally friendly manner. This has been a difficult year for our employees, with many changes over the course of the year, and I would like to thank everyone for their support during this period.

Strategy
KHD’s long term vision is to become a customer focused equipment supplier and service company providing competitive, environmentally friendly, technologies. The key elements of this strategy are as follows:

• Continue to develop and strengthen the competitiveness of KHD’s product portfolio

• Broaden KHD’s product offering via strategic partnerships

• Develop a service offering in order to reduce the cyclicality of the business and improve the sustainability of earnings

• Capitalise on KHD’s existing market position in emerging markets such as India and Russia

• Implement an account management system so that KHD adopts a more strategic and customer focused approach to sales and marketing

Yours faithfully,

Jouni Salo

^₁ Kindly note that more detail on our 2009 results can be found on the investor relations page of our website.

^₂ As a brief reminder, up to 29 March KHD group comprised a mineral royalty company and an industrial plant technology, equipment and service company. Subsequently these activities have been divided in two, with the mineral royalty company becoming Terra Nova, listed in New York and KHD Humboldt Wedag International, listed in Frankfurt.