Welcome to KHD · MARKET ENVIRONMENT Consumption Replacement of technology Substitution of imports...

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Welcome to KHD

September 2006

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Company Presentation

Certain statements in this presentation concerning future events or our future financial performance are forward looking statements, which reflect the expectations of management regarding future growth, results of operations, performance and business prospects and opportunities for KHD Humboldt Wedag International Ltd. (“KHD“). Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. KHD representatives will use their efforts to identify such statements during this presentation.

These forward looking statements are only predictions and involve assumptions, known and unknown risks, uncertainties and other factors that may cause KHD's or its industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in these forward-looking statements. Although KHD believes that the expectations reflected in the forward-looking statements are reasonable, KHD cannot guarantee future results, levels of activity, performance or achievements.

The assumptions, risks and uncertainties that could affect future events or KHD's future financial performance, as well as the material factors or assumptions applied in making such forecasts or projections, are more fully described in KHD's quarterly report filed on August 14, 2006 (on Form 6-K filed in the US and on Form 51-102F1 filed in Canada) and our annual report filed on April 3, 2006 (on Form 20-F filed in the US and Canada). These filings are available at www.sec.gov in the US and www.sedar.com in Canada.

DISCLAIMER

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Agenda

Executive Summary

Group Overview

Group Strategy

Financial Information

Contact Details

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KHD Humboldt Wedag International Ltd. (“KHD”) is an industrial plant engineering and equipment supply company with a focus in the cement, coal and minerals processing industries.

We are currently completing our transition from a financial services company to a pure industrial plant engineering and equipment supply company:

In November 2005 we changed our name from MFC Bancorp Ltd. to KHD to reflect the change in our business orientation.We have transferred a significant part of our financial services assets to Mass Financial Corp. (“Mass”) and distributed shares of Mass to our shareholders in January 2006.We plan to dispose certain redundant assets relating to the old financial services business by the end of 2006.

We believe this focus on core competencies will realize the greatest value for shareholders.

Results for our industrial plant engineering and equipment supply business for the first six months of 2006 show growth vs. the same period last year:

Revenues are up by 18% to US$ 150.9 million. EBT is up by 28% to US$ 14.7 million.Order intake has grown by 97% to US$ 384.6 million. Order backlog has grown by 83% to US$ 563.9 million.

EXECUTIVE SUMMARY (1/2)

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The environment for our products has been favorable, and we see demand for our products to continue over the medium term.

Growth in cement consumption (Russia, Eastern Europe, India and China)Replacement of technology (Asia and Russia).Substitution of imports through local production (USA).

We have strengthened our executive team through the appointment of senior managers for Mergers & Acquisitions, Technology Transfer, Risk Management, Internal Audit and Global Procurement.

We have put in place three key strategic initiatives.Profit Improvement Plan: Increase margins through the transfer of engineering and procurement functions to low cost locations, in particular India. Establish an extensive global risk management program.Innovation Plan: Put in place a significant capital expenditure program to expand our position as technology leader.Diversification Plan: Grow our coal & minerals business and push into related businesses, organically and through acquisitions.

EXECUTIVE SUMMARY (2/2)

A strategy to achieve the attractive multiples of other companies in the industrial plant engineering and equipment supply industry.

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Agenda

Executive Summary

Group Overview

Group Strategy


Contact Details

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The group has activities in two areas, cement and coal & minerals.

COAL & MINERALSCEMENT

INTRODUCTION

ACTIVITIES DesignEngineeringManufacturingErectionCommissioning

of equipment for cement plants.

DesignEngineeringManufacturingErectionCommissioning

of coal and minerals processing equipment.

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KHD has the skill and know how to provide approximately 55% of the equipment value of a new cement plant.

Crushing of Limestoneand Clay

Crusher

Blasting and Quarrying

Drilling machine,Loader

Storing, Mixing andPre-Homogenizing

Blending Bed

Raw Material GrindingBall mills,

Roller presses

Clinker Burning

Preheater, Kiln,Burner, Clinker Cooler

Clinker Storage

Clinker Silo

Storing of Cement

Cement Silo

Clinker Grinding

Grinding Plants,Separators

Packing

Packing Plant

Raw Meal Homogenizing

Raw Meal Silo

Waste Gas CleaningElectrostatic Precipitator,

Bag filler

PROCESS AUTOMATION / EXPERT SYSTEMS

8% 5% 8% 15%

3% 8% 20% 4%

15% 6% 8%

= KHD core competence

Note: Percentage figures denote percentage of overall value of a cement plant for each process step.

BUSINESS UNIT CEMENT

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Indonesia 4

Malaysia 4

KHD has built more than 470 cement plants world wide.

USA37

Ecuador 1Brazil

16Argentina

8

Saudi Arabia10

Russia 150

Sri Lanka3

India20

3Thailand

10 Iran

10China

> 140

> 110

> 25

> 60Americas

more than 60

Africamore than 25 Australia

3

Asiamore than 110

Korea 4

Europemore than 140


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Each plant has a different set of requirements. . . (1 of 2)

Ras Cement, Shree Line III, India

Yanbu Cement Co. Ltd, Saudi Arabia

3,000 t/day pyroprocessing section and 250 t/hour grinding plant, built in 2005.New line can use up to 100% petcoke for firing.First two lines of plant built by KHD in 1995.

9,000 t/day clinker production.Largest production line in the Gulf region.


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Kiln &Preheater

Finish Grinding

app. 100 meter 1,370 meters above sea level

Clinker Silo

Cooler & Cooler ESP

… in order to meet different objectives. (2 of 2)

India’s largest clinker production plant and one of the largest cement production lines worldwide with a capacity of 10,000 t/day

High altitude (1,370m above sea level)


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Our track record is a direct result of KHD’s history of innovations.

Many of the designs developed by KHD have become standards in the industry, including innovations in:

Today, KHD holds 305 patents and 159 trademarks.

KHD has set the industry standards for energy efficiency and environmental compatibility in a number of areas. Dramatic advances in process engineering, reduced fuel consumption and lowered NOX emissions.

Our most recent major R&D initiative, the PYROFLOOR® clinker cooler has already sold 14 units to eight countries following its launch in the second quarter of 2005 after only 15 months of development. The PYROFLOOR® is a major new cooler design that has many advantages over traditional designs, including reduced height requirements, minimal installation time and costs, high thermal efficiency, minimal wear and reduced maintenance.


Kiln design

Pyro processing

Calciners

Coolers

Grinding technologies

Separators and roller presses

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KHD’s Coal and Minerals activities focus on the sorting and washing of coal, and the grinding of minerals.

Primary MinesSecondary Deposits

Downstream IndustriesConsumer

MixingBlending

Conveying

ClassifyingScreensDedusters

SortingJigs,Heavy Medium SeparationFlotation

DewateringScreens

BUSINESS UNIT COAL AND MINERALS

= KHD core competence

ChemistryFlotation ReagentsFlocculants

Comminution (Crushing)Roller Press

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Canada1

USA 6

Brazil2

South Africa13

Europe50

Eastern Europe

5

India

14

China

40

Thailand3

Australia10

Since entering this business area, KHD has supplied equipment to 150 coal plants world wide.


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Process and mechanical equipment by KHD.Core system: BATAC® jig with a width of 7m.Largest coal jig in Russia.

1st stage of extension: BATAC® jigsfor 8.0 million tons iron ore concentrate.2nd stage of extension: planned for 2008 for 8.0 million tons iron ore concentrate.

4.5 million t/y coal washing plant forOAO Belon at Listwjaschnaya, Russia

8.0 million t/y iron ore processing plant forBeeshoek, South Africa


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KHD also delivers technologies for the mining industry.


KEY PRODUCTS

Ball Mills

Roller Presses

Separators

Roller Presses for Minerals delivered by KHD

Pilot Roller Presses available

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Growth in industrial plant engineering and equipment supply revenues and EBT.

RECENT PERFORMANCE

Exchange rate: Can$ 1.1150/US$. Source: KHD Humboldt Wedag International Ltd. Form 6-K, 08–14–2006 Chairman’s Report p. 2

150.9128.3

2005 2006

84.673.0

2005 2006

KEY DRIVERS - REVENUES

Strong world wide demand.

Broad technical acceptance.

Repeat business a sign of customer trust.

Revenues (Three months to June 30, 2006. Unaudited)

Revenues(Six months ended June 30, 2006. Unaudited)

EBT (Three months to June 30, 2006. Unaudited)

EBT(Six months ended June 30, 2006. Unaudited)

+ 16 %+ 16 %US$ million + 18 %+ 18 %

10.29.0

2005 2006

+ 13 %+ 13 %

14.711.5

2005 2006

US$ million + 28 %+ 28 %

KEY DRIVERS - EBT

INDUSTRIAL PLANT ENGINEERING AND EQUIPMENT SUPPLY BUSINESS

Increased cost controls.

Improving margin.

Currency exchange rate reduced revenues and earnings.

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Growth in the key indicators of our operating business, order intake and backlog.

RECENT PERFORMANCE

Exchange rate $ 1.1841/€. Note: Order intake excludes US$ 1.9m from the real estate business in the period ended June 30, 2006.Source: KHD Humboldt Wedag International Ltd. Form 6-K, 08–14–2006 Chairman’s Report p. 6-7

149.6178.6

359.613.0

12.3

23.2

2004 2005 2006

US$ million

162.6

190.9

382.7

194.2

295.3

518.5

11.1

12.6

45.4

2004 2005 2006

US$ million

Coal andMinerals

Cement

307.9

563.9

Growth in order intake and order backlog.

Order backlog will translate into revenues over the next 12–18 months.

Coal & minerals growth higher then cement, in line with our strategic objectives to push a diversification into related industries.

NotesOrder Intake(Six months to June 30)

Order Backlog(at June 30)

Coal andMinerals

Cement

CAGR: 53.4% CAGR: 65.7%

205.3

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KHD has a good geographic mix of order intake.

RECENT PERFORMANCE

* Including real estate. Exchange rate $ 1.1841/€ . Source: KHD Humboldt Wedag International Ltd. Form 6-K, 08–14–2006 Chairman’s Report p. 6

3%

10%

26%

28%

33%

US$ million

Total: 384.6*

Order Intake(Six months to June 30)

Other

Asia (primarily India)

Americas

Europe (primarily Russia/Eastern Europe)

Middle East

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We see continued strong demand for our products in the medium term, and we are already well positioned in key markets.

MARKET ENVIRONMENT

Consumption Replacement of technology Substitution of imports

Cement consumption is forecast to grow by 3% p.a. from 2.3 bn tons in 2005 to 3.6 bn tons in 2020.

Commodity prices remain high due to global economic expansion.

Key areas for growth are India, China, Eastern Europe and Russia.

Russian, Chinese and Indian markets require modernizations.

Capacity shortages and imports are leading to capacity additions in North America.

Russia, China and India are trying to become net exporters of basic industrial commodities.

MA

RK

ET

Drivers of Growth

KH

D

Sales offices in China and Russia have been converted to operating companies.

50+ years KHD experience in India and Russia.

India is the focus for our low cost platform. Cement order backlog at our Indian subsidiary has increased to US$ 105.9 million at June 30, 2006, up from US$ 58.3 million at March 31.

32 years of experience in the US market.

Cement order backlog of our US subsidiary has increased from US$ 34.5 million on March 31, 2006 to US$ 117.2 million by June 30, 2006 .

Source: Exane BNP Paribas, KHD Humboldt Wedag International Ltd. Form 6-K, 08–14–2006 Chairman’s Report p. 7

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SWOT ANALYSIS

STRENGTHS OPPORTUNITIES

Excellent reputation for high quality technology.

International track record.

Customers trust the KHD brand.

Strong market growth, with current cement consumption forecast to grow from 2.3 bn tons in 2005 to 3.6 bn tons in 2020.

Bulk of growth in Asia, Eastern Europe and North America.

WEAKNESSES THREATS

Too many activities carried out in a high cost environment.

Some existing technology is outdated.

Limited presence and expertise in Latin America.

Emergence of low cost competitors (e.g. China).

Financial threat if orders are not completed on time.

Internal controls and growth funding opportunities must be adjusted to reflect the larger size of the business.

We nevertheless have to address weaknesses and remedy threats.

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Agenda

Executive Summary

Group Overview

Group Strategy


Contact Details

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We have put in place three strategic intiatives.

GROUP STRATEGY

Profit Improvement Innovation Diversification

Increase margins through the transfer of engineering and procurement functions to low cost locations.

Establish an extensive global risk management and internal audit program.

Significant R&D program to expand our position as technology leader.

“Systematize” design process.

Grow our existing coal & minerals business.

Push into related industries and technology where our know-how can be applied.

Execute through organic growth and through acquisitions.O

BJE

CTI

VE

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GROUP STRATEGY

Our key focus is on profit improvement.

Management

Strengthen senior management team through the appointment of executives for risk management, technology transfer, global procurement, mergers & acquisitions and internal audit.

Operations

Increase engineering and procurement capacities in low cost location. Manpower in India has already increased from 225 staff in 2004 to 309 by the end of 2005, with a further increase to 450 forecast by the end of 2006.

Additional low cost outsourcing capacity in India is expected to be available in the third quarter.

Sales offices in Russia and China have been converted to operating companies with design, manufacturing and procurement capabilities.

Risk management/Internal audit

New global heads of risk and internal audit are developing and formalizing procedures, supported by external consultants.

ACTION

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GROUP STRATEGY

We have formalized a major new R&D initiative to replicate the success of our last development, the PYROFLOOR® cooler.

$ 9.5 million KHD investment, founded through grants, tax incentives, partnerships and government grants.

FUNDING

TIMELINE Three phase process:

Phase 1 – Basic Evaluation and Approach Decision: 2006

Phase 2 – Concept Definition: 2007

Phase 3 – Verification: 2007

Market-pull: Reduction of CO2 emissions and energy efficiency are top priorities for our customers.

Technology push: KHD has been investigating alternative grinding technologies, and we have identified promising ideas in heat recovery/conversion technology.

RATIONALE

Improve grinding technology.

Reduce emissions.

Decrease energy costs.

FOCUS

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GROUP STRATEGY

Our coal & minerals business has grown faster than cement over the past two years, but we still need to reduce dependency on cement.

BACKGROUND

We are diversifying into other industries.

2004 2005 2006Coal and Minerals 8.4 14.3 27.8

Total* 63.2 110.9 137.6

US$ million, unaudited

Coal and Minerals (% of total) 13% 13% 20%

Revenues for the period ended June 30,

We have created a separate legal entity for our coal & minerals business in 2006 to increase visibility and focus for this business unit.

In addition to organic growth we need to acquire companies or technology and consider strategic alliances to achieve our diversification targets. We have recruited a global manager for mergers & acquisitions and are considering hiring an investment banking advisory firm.

Acquisition targets for new technologies and complementary skill sets in strategic fields and locations have been identified, contacted and negotiations initiated.

ACTION

Exchange rate $ 1.1841/€Source: KHD Humboldt Wedag International Ltd. Form 6-K, 08–14–2006 Chairman letter p. 6 and 7. * Excluding revenues from real estate operations (US$ 1.8 million in 2006).

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Agenda

Executive Summary

Group Overview

Group Strategy


Contact Details

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Cash and cash equivalents: $ 211,558

Short-term securities: $ 16,551

Working capital: $ 208,066

Total assets: $ 554,762

Shareholders’ equity: $ 278,104

Book value per share: $ 18.22

Current ratio: 2.07

Long-term debt to equity ratio: 0.07

FINANCIAL INFORMATION

— FINANCIAL SUMMARY (JUNE 30, 2006) —(Unaudited. All data in US$ thousands except per share data and ratios)

Exchange rate: Can$ 1.1150/US$. Source: KHD Humboldt Wedag International Ltd. Form 6-K, 08–14–2006 Chairman’s Report p. 50

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Exchange rate: Can$ 1.1150/US$. Source: KHD Humboldt Wedag International Ltd. Form 6-K, 08–14–2006, p. 46-47

US$ ‘000. UnauditedASSETS LIABILITIES AND SHAREHOLDERS’ EQUITY

$ 211,55821,82616,551

2,52131,86120,00033,52128,83223,32811,952

401,950

- Securities- Loans- Properties, plant and equipment- Investment in resource property- Goodwill- Equity method investments- Future income tax assets- Investment in preferred shares of former subsidiaryTotal non-current assets

Current Assets

Non-current Assets

- Cash and cash equivalents- Restricted cash- Securities- Loans- Receivables, industrial plant engineering and equip. supply- Receivables- Inventories- Real estate held for sale- Contract deposits, prepaid and other- Future income tax assetsTotal current assets

$ 155,248619

1,2788,702

28,037

193,844

Current Liabilities- Accounts payable and accrued expenses- Notes payable, industrial plant engineering and equip. supply- Pension liabilities- Deposits- Provision for warranty costs

Total current liabilities

80010,34711,36131,696

9,687908

8,28279,731

152,812

Total Assets $ 554,762

- Long-term debt, less current portion- Pension liabilities- Provision for warranty costs- Future income tax liability- Other long-term liabilities

Total long-term liabilities

Long-term Liabilities20,26527,957

6,7437,253

226

62,444

Total Shareholders’ Equity and Liabilities $ 554,762

Minority interests 20,330Shareholders’ Equity- Common stock- Contributed surplus- Equity component of convertible debt- Retained earnings- Cumulative translation adjustment- Total Equity

76,477407

80229,235(28,095)278,104

BALANCE SHEET AT JUNE 30, 2006

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US$ ‘000, except per share data. UnauditedSix months to

RevenuesExpensesCost of revenuesGeneral and administrativeStock-based compensationInterestTotal Costs and ExpensesIncome before income taxes

Provision for income taxesIncome before Minority InterestsMinority interestNet IncomeEarnings per ShareBasic

DilutedWeighted Average Shares OutstandingBasicDiluted

June 30, 2006

$ 88,203

69,2098,789

407396

78,8019,402

(124)9,278

(1,945)$ 7,333

$ 0.48

$ 0.48

15,217,86615,350,749


Exchange rate: Can$ 1.1150/US$. Source: KHD Humboldt Wedag International Ltd. Form 6-K, 08–14–2006, p. 48-49

CONSOLIDATED STATEMENT OF INCOME

$ 189,054

153,51318,717

4071,692

174,32914,725

(1,969)12,756(2,498)

$ 10,258

$ 0.69

$ 0.69

14,493,13215,078,748

June 30, 2006Three months to

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Source: KHD Humboldt Wedag International Ltd. Form 6-K, 08–14–2006, Chairman’s Report p. 1

LIMITED GUIDANCE — INDUSTRIAL PLANT ENGINEERING AND EQUIPMENT SUPPLY

Q1 (actual)

Q2(actual)

Q3(forecast)

Q4(forecast)

2006(forecast)

Revenues 63.3 84.6 131.8 144.9 424.6

EBT 4.5 10.2 10.7 12.5 37.9

EBT Margin 7.1% 12.1% 8.1% 8.6% 8.9%

US$ million (except margin data)

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* Revenues for six months to June 30, 2006 for all companies except Larsen & Toubro Ltd, which is for three months ended June 30, 2006.** ttm = twelve trailing months. *** KHD net income for the twelve trailing months includes the financial services business spun off in January 2006.Note: Share price data has been calculated on the basis of September 1, 2006 US$ exchange rates. All other data uses the US$ exchange rates as of June 30, 2006.Source: Company accounts, Bloomberg

Shares outstanding

Shares outstanding — diluted

Shareholders' equity (US$ ‘000)

Share price closing, Sep 1, 2006 (US$)

Market capitalization (US$ ‘000)

Revenues (US$ ‘000)*

Net income ttm** (US$ ‘000)

Net income last six months (US$ ‘000)

Working capital (US$ ‘000)

Working capital ratio

Price / Book value per share

Price / Earnings per share diluted ttm

*

13,000,000

13,018,520

443,065

155.24

2,018,175

1,242,685

114,206

53,124

453,411

1.31

4.56

17.70

Andritz AG

168,000,000

168,000,000

95,573

2.35

395,061

325,452

15,974

7,917

45,229

1.08

4.13

24.73

Sinoma International Engineering

Co. Ltd.

15,263,913

15,078,748

278,104

31.58

482,034

189,054

•***

10,258

208,066

2.07

1.73

•***

KHD Humboldt

Wedag International

Ltd.

53,200,000

52,839,587

411,879

44.36

2,360,117

892,938

82,308

34,674

351,116

1.32

5.73

24.63

FLSmidth & Co. A/S

139,139,000

139,923,000

1,112,432

52.08

7,246,592

747,201

221,028

134,438

901,648

1.51

6.51

32.97

Larsen & Toubro

Ltd.

June 30, 2006 FY 12/31 FY 12/31 FY 12/31FY 12/31 FY 03/31

Peer group review

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An investment of US$ 1,000 in KHD on March 31, 1996 has grown to more than US$ 20,000* by August of 2006.


* Excluding special dividends. ** Measures performance of 2,000 smallest companies in the Russell 3000® index. The average market capitalization of companies in the Russell 2000 index at the latest constitution was US$ 762.8 million, the median market capitalization was approximately US$ 613.5 million.Source: Company accounts, Russell

Development of an Investment of US$ 1,000 CAGR

20.338

2.411

KHD Russell 2000 Index*

33.6%

8.6%

Closing share/Index price

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The objective of our strategy to enhance shareholder value is to achieve the attractive multiples of publicly traded companies in the industrial plant engineering and equipment supply industry.

Our transition to a pure industrial player from a financial services company is almost complete.

Our recent performance in our core business has been characterized by strong growth in sales, order intake, order backlog and most importantly earnings.

While past performance has been strong, we will continue to do better.

To enhance earnings we have recruited a new senior management team, and have put in place three strategic initiatives:

Profit Improvement Plan. Transition engineering and procurement to low cost locations (India).Diversification Plan. Grow or enter non-cement businesses, carry out acquisitions. Innovation Plan. Major R&D initiative focusing on CO2 reduction and energy efficiency.

We are committed to clear, accurate, timely and comprehensive disclosure to shareholders and the capital markets.

Launched quarterly investor conference calls.Subject to final regulatory approval change our reporting currency to US$ in 2007.

SUMMARY

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CONTACT DETAILS

KHD Humboldt Wedag International Ltd.Suite 803, 8th FloorDina HouseRuttonjee Centre11 Duddell StreetCentral Hong Kong

Telephone Hong Kong: 011 (852) 2537.3613Facsimile Hong Kong: 011 (852) 2537.3689 Telephone North America: 1 (604) 683.8286www.khdhumboldt.com

Welcome to KHD · MARKET ENVIRONMENT Consumption Replacement of technology Substitution of imports...

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