Klöckner & Co - All Stars Conference 2009

42
Kl Kl ö ö ckner & Co SE ckner & Co SE A Leading Multi Metal Distributor A Leading Multi Metal Distributor Merrill Lynch Merrill Lynch All Stars Conference All Stars Conference April 1, 2009 April 1, 2009 Gisbert R Gisbert R ü ü hl hl CFO CFO

description

Merrill Lynch All Stars Conference, April 1, 2009

Transcript of Klöckner & Co - All Stars Conference 2009

KlKlööckner & Co SEckner & Co SEA Leading Multi Metal DistributorA Leading Multi Metal Distributor

Merrill LynchMerrill LynchAll Stars ConferenceAll Stars ConferenceApril 1, 2009April 1, 2009

Gisbert RGisbert RüühlhlCFOCFO

2

Agenda

2.

Full year results 2008

Appendix

3.

Market update

4.

Strategy update

5.

Outlook

1.

Overview

3

Klöckner & Co at a glanceKlöckner & Co

Leading producer-independent steel and metal distributor in the European and North American markets combined

Network with 260 distribution locations in Europe and North America

More than 10,000 employees

GB

24%

21%

14%8%

6%

8%

19%Germany

France Spain

Nether-lands

Switzerland

Sales split by markets

As of December 2008

Steel-flat Products

Steel-long Products

Special and

Quality Steel

Aluminum

Other Products

31%

31%

10%

8%

6%

14%

Sales split by product

As of December 2008

Other

Machinery/Manufacturing

Auto-

motive

42%

24%

5%

29%

Sales split by industry

As of December 2008

Construction USA

Tubes

4

Distributor in the sweet spot

Local customersGlobal suppliers

Suppliers Sourcing Products and services

Logistics/

Distribution Customers

Global Sourcing in competitive sizesStrategic partnershipsFrame contractsLeverage one supplier against the otherNo speculative trading

One-stop-shop with wide product range of high-quality productsValue added processing services Quality assurance

Efficient inventory managementLocal presenceTailor-made logistics including on-time delivery within 24 hours

~185,000 customersNo customer with more than 1% of salesAverage order size of €2,000Wide range of industries and marketsService more important than price

Purchase volume p.a. of >6 million tonsDiversified set of worldwide approx. 70 suppliers

Klöckner & Co’s value chain

5

Volume related increase and windfall profits result in strong EBITDA but high level of capital employed because of value and volume of stock

How the business model of Klöckner & Co works in…

High profitability in upturn due to windfall profits and volume increaseStrong cash flow generation in downturn due to working capital release

an upturn with price and volume increases

EBITDAStock turnover

cycle

of ~80 days

EBITDA

Δ

Windfall

profits

Δ

Volume

Windfall losses and write-offs but strong cash flow generation to reduce net debt

a downturn with price and volume declines

Net working

capital

Stock turnover

cycle

of ~80 days

Net working

capital

Cash flow

6

Cash flow goes up in a downturn market

1

1999 to 2005 unaudited

pro-forma

figures, Cash flow

adjusted

for

M&A-activities;

Sales in €

bn1

EBITDA in €

million1

Year

FCF in €

million1

201 65 211 69 112 80 147 126 86

4.5

5.3

4.2 4.0 3.8

4.85.0

1999 2000 2001 2002 2003 2004 2005

151 220 150 156 140 349 197

5.5

2006

395

6.3

2007

371

6.7

2008

600

147

7

Agenda

2.

Full year results 2008

Appendix

3.

Market update

4.

Strategy update

5.

Outlook

1.

Overview

8

Portfolio optimization succeeded, strict and fast adjustments to

current conditions adopted

Highlights FY 2008

Delivery on growth strategy

Acquisition of Temtco (USA) and Multitubes (UK)

Concentration on core business

Sale of Canadian Namasco and Swiss KVT

Transformation into an SE

Immediate action program in response to negative economic developments

Significant reduction of net debt

STAR fully on track

9

Revenue and EBITDA at all time highs despite hit in Q4

Financial highlights FY 2008

Revenues 7.6% up to €6.7bn

Reported EBITDA increased by 62% to €600m

Operating EBITDA increased by 27% to €420m, negatively impacted by year-end inventory write-downs of approx. €60m

Underlying EBITDA margin at 6.4% with €435m

Significant reduction of net debt to €571m, almost halved since Q2 2008

Tonnage decreased by 7.8% to 6.0m tons in 2008, mainly driven by shortfall in Q4 and deconsolidation of Namasco Ltd.

10

Results Q4/FY 2008

(€m) Q4 2008

Q4 2007 Δ% FY

2008FY

2007 Δ%

Volume (Ttons)

1,151 1,585 -27.3 5,974 6,478 -7.8

Sales 1,394 1,492 -6.5 6,750 6,274 7.6

EBITDA -134 83 -262.1 600 371 62.0

EBIT -152 65 -334.6 533 307 73.7

11

Underlying EBITDA again improved

Underlying EBITDA FY 2008

(€m) Q42008

Q42007 Δ FY

2008FY

2007 Δ

EBITDA as reported●

One-off items●

Cartel fine France

-134

-579

83-6

-217

1

600-259

79

371-40

229

-219

Operating EBITDA●

Windfall effects●

Exchange rate effects●

Special expense effects

-60

93

-14

63

7773

-6

-137

86

-17

69

420

-40

352

331209

12

89

-60

-6

40

Underlying EBITDA 81 81 0 435 372 63

Acquisitions (LTM*) 5 -6 11 -48 -24 -24

Underlying EBITDA excluding Acquisitions 86 75 11 387 349 38

* LTM: Last twelve months

12

Balance sheet as of Dec. 31, 2008

(€m) December 31, 2008

December 31, 2007

Long-term assets 803 735Inventories 1,001 956Trade receivables 799 930Cash & Cash equivalents* 297 154Other assets 175 191Total assets 3,075 2,966Equity 1,074 845Total long-term liabilities 1,175 1,152

-

thereof financial liabilities 813 813Total short-term liabilities 826 969

-

thereof trade payables 392 610Total equity and liabilities 3,075 2,966Net working capital 1,407 1,323Net financial debt 571 746

Comments

Shareholders’

equity:Increased from 28% to 35%

Financial debt:Leverage reduced from 2.0x to 0.95x EBITDAGearing reduced from 88% to 53%

Net Working Capital:Increase is price-driven

* Including restricted cash of €3m

13

Strong cash flow generation leads to net debt of currently €358m

Business model works also under extreme conditions

Net working capital Net debt

In €

millionIn €

billion

Q3/2008 Q4/2008

-18%

1.71.4

currently Q3/2008 Q4/2008

-17%690

571

Currently*

358-37%

*as of March

20, 2009

14

Agenda

2.

Full results 2008

Appendix

3.

Market update

4.

Strategy update

5.

Outlook

1.

Overview

15

Demand and stock risks are dominating steel market outlook in Europe

137.474.4 63.8 75.2 70 78.6 88.2113.2 89.9 100.965.165.1109.1

62.3

111 112.8

96.6

115.9

98.7109.1

99.9

75.1

98.690.9

72

56.4

0

20

40

60

80

100

120

140

160

Dec07

Jan 08

Feb08

Mar08

Apr 08

May08

Jun 08

Jul 08

Aug08

Sept08

Oct08

Nov08

Dec08

Stocks Sales index

Source: Eurometal, Q1 2007 = 100%

137,474,4 63,8 75,2 70 78,6 88,2113,2 89,9 100,965,165,1109,1

96,8 99,9 104,3 106,3 101,7109,2 107,6 110,6 111,5 110,1 107,9

101,295,4

0

20

40

60

80

100

120

140

160

Dec07

Jan 08

Feb08

Mar08

Apr 08

May08

Jun 08

Jul 08

Aug08

Sept08

Oct08

Nov08

Dec08

Stocks Stock index

Sales volumes

compared to stockholding

daysStocks compared

to stockholding days

16

US

In the US demand and stock situation is the same

10,66410,026

9,1388,642 8,481 8,308

-1.5%

-29.3%-32.7%

-42.7%

-22.8%

-7.6%

-43.3%

-20.3%

-52.3%

-42.7%

-51.7%-52.8%0

2,000

4,000

6,000

8,000

10,000

12,000

Sept 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09

Ser

vice

cen

ter i

nven

tory

(000

tons

)

-60%

-50%

-40%

-30%

-20%

-10%

0%

Y-O

-Y c

hang

e in

mill

pro

duct

ion

& se

rvic

e ce

nter

shi

pmen

ts

Inventory Steel production Shipments

Stocks compared

to stock to shipment

ratios Steel mills have cut production drastically

Source: MSCI, American Iron and Steel Institute

Low demand leads to increasing stock to shipment ratios despite significant production cuts

1,5

2

2,5

3

3,5

4

Jan-98 May-99 Jun-00 Jul-01 Aug-02 Sep-03 Oct-04 Nov-05 Dec-06 Jan-08 Feb-09

Mon

ths'

sup

ply

on h

and

7000

8000

9000

10000

11000

12000

13000

14000

15000

Mon

thly

inve

ntor

ies

('000

tons

)

Inventory Months' supply

Source: Metal Service Center Institute Source: Metal Service Center Institute, American Iron and Steel Institute

17

Prices are decreasing further after sharp decline in Q4 2008Significant global production cuts and destocking have not stabilized prices so farIf demand stays weak falling raw material contract prices could again pressure prices in Q2Government stimulus programs are expected to support steel demand but with limited effect in 2009

Price risks are ongoing due to demand/stock situation

EU domestic prices in EUR/to

300

400

500

600

700

800

900

1000

Jan 0

6Mar

06May

06Ju

l 06

Sep 06

Nov 06

Jan 0

7Mar

07May

06Ju

l 07

Sep 07

Nov 07

Jan 0

8Mar

08May

08Ju

ly 08

Sep 08

Nov 08

Jan 0

9Mar

09HRC Medium sections

NA domestic prices FOB US Midwest mill in USD/to

400

500

600

700

800

900

1000

1100

1200

Jan 0

6Mar

06May

06Ju

l 06

Sep 06

Nov 06

Jan 0

7Mar

07May

07Ju

l 07

Sep 07

Nov 07

Jan 0

8Mar

08May

08Ju

l 08

Sep 08

Nov 08

Jan 0

9Mar

09

HRC WF Beams

18

Agenda

2.

Full results 2008

Appendix

3.

Market update

4.

Strategy update

5.

Outlook

1.

Overview

19

Executed immediate action programs and STAR

Immediate action programs(started in Oct. 2008, upgraded in March 2009)

Reduction of around 1500 jobs or 15% of total workforceKey priority is liquidity and NWC managementStock and inventory as key lever for debt reductionAcquisitions are postponed for the time beingNon-essential investments postponedFull impact (€ 130 million) can only be seen from 2010 onwards

STAR Phase I + II

Focus:European sourcingOngoing improvement of distribution networkMain areas of savings: sales, supply chain, purchasing

Further upside potential

2006

~ €20 million2007

~ €40 million2008

~ €30 million2009

~ €30 million2010

~ €20 million~ €140 million

Net savings of ~ €100m for 2009 targeted

Program I ~ €25 millionProgram II

~ €40 million~ €65 million

20

STAR measuresSalesSourcing Warehousing / Distribution

Centralization of sourcing functionSupplier concentrationThird country sourcing

Warehouse network optimization (incl. site closure)Concentration of stock in single locationsOptimization of internal and external logistics

Customer segmentation by size and tradeProfitability oriented pricing and service offeringReigniting dormant accounts

Product Portfolio / Service Offering

Product portfolio optimization (profitability / capital requirements)Increasing share of value added services

Sharing of products within GroupEliminating slow/no movers

Processes / IT Systems (Enabler)

Standardizing processesIntroduction of standardized SAP suit and data model (article codes, inventory management, etc.)

Shared servicesActivity based costing (ProDacapo)

21

Three updated scenarios for 2009

On the following three slides we provide a framework of how our business can be impacted by volume and price declines in general

Three different scenarios are shown:

A: -12% in volumes, 3%-points gross margin contraction

B: -15% in volumes, 3%-points gross margin contraction

C: -18% in volumes, 3%-points gross margin contraction

The scenarios do not necessarily reflect management's expectation about future development

Since the visibility for 2009 is limited we cannot provide guidance at this point in time

The scenarios cannot be taken as a guidance

22

EBITDA

Leverage

Scenario A (-12% volume and 3%p gross margin contraction)

Net Debt

Credit facilities

€1.8bn

Convert.€325m

Bilaterals€380m

ABS€505m

Syn-Loan€600m

Operational

EBITDA 2008

Net debt

YE

2008

420 -40 380 -195

-155+95 100-25

570-40

1.4

<+100

420 380 -195

-155

570 -240

<390

<3.9

EBITDA scenario

AImpact

acquisitions

LTM / Divestments

Variable cost

reductions, action

program

and STAR

12% volume

reduction3% margin

contractionOperational

EBITDA starting

point w/o windfalls

Windfalls 2008

Net debt

scenario

ACash out

cartel

penaltyAdditional cash

flow

w/o change

NWC

17% NWC

reduction

Leverage

scenario

ALeverage

YE

2008

23

Scenario B (-15% volume and 3%p gross margin contraction)

EBITDA

Leverage

Net DebtCredit

facilities

€1.8bn

21%

Convert.€325m

Bilaterals€380m

ABS€505m

Syn-Loan€600m

Operational

EBITDA 2008

Net debt

YE

2008

Leverage

YE

2008

-40+105 70-25

-10

1.4

<+100

420 380 -195

570

<380

<5.4

EBITDA scenario

BImpact

acquisitions

LTM / Divestments

15% volume

reductionOperational

EBITDA starting

point w/o windfalls

Windfalls 2008

Net debt

scenario

BCash out

cartel

penaltyAdditional cash

flow

w/o change

NWC

20% NWC

reduction

Leverage

scenario

B

-280

-195

3% margin

contractionVariable cost

reductions, action

program

and STAR

24

Scenario C (-18% volume and 3%p gross margin contraction)

EBITDA

Leverage

Net Debt

Credit facilities

€1.8bn

Operational

EBITDA 2008

Net debt

YE

2008

Leverage

YE

2008

+11035-25

+20

1.4

<+100

-40420 380 -195

-235

<365

<10

EBITDA scenario

CImpact

acquisitions

LTM / Divestments

18% volume

reduction3% margin

contractionOperational

EBITDA starting

point w/o windfalls

Windfalls 2008

Net debt

scenario

CCash out

cartel

penaltyAdditional cash

flow

w/o change

NWC

20% NWC

reduction

Leverage

scenario

C

-325570

Variable cost

reductions, action

program

and STAR21%

Convert.€325m

Bilaterals€380m

ABS€505m

Syn-Loan€600m

25

Current Capitalization

Facility Committed Current drawn amount*

Currently drawn % Margin Maturity Covenants

Bilateral Facilities €380m €65m 17%EU: 50-100 bp

US: 175-225 bpN/A N/A

ABS €505m €157m 31%EU: 75 bp

US: 55 bp

EU: 2010

US: June 2012

5x EBITDA

Interest coverage ratio:

2* net interest expense

Syndicated Loan €600m €231m 39%60–130 bp,

currently 75 bpMay 2011 3x EBITDA

Interest coverage ratio: 4 * net interest expense

Total Senior Debt €1,485m €453m 31%

Convertible €325m €328m 100% Coupon 1.5% July 2012

Total Debts €1,810m €781m 43%

IFRS adj. €45m

Cash €378m

Total net

debt €358m

*as of March

20, 2009

Net indebtedness currently reduced to €358m

26

Partial restructuring of current facilities to extend financial flexibility

Planned changes in capital structure

Increased volatility and much more challenging debt markets require changes of current capital structure

Reduction of reliance on bank debt

Non-performance covenants structures

Clear differentiation between financing of NWC and acquisitions

Further diversification of financing sources

27

Changing debt markets require adjustment of capital structure

Target

financial structure

Bank Debt Securitized Debt

Capital MarketDebt

NWC

Acquisitions

BilateralFacilities ABS Convertible

SyndicatedLoan

600

380

505

325

54%

28%

18%

Bank Debt Securitized Debt

Capital MarketDebt

NWC

Acquisitions

Current financial structure

Sources

Usage

Facilities

No dependence on performance covenants

Perfo

rman

ce C

oven

ants

Perfo

rman

ce C

oven

ants

28

Agenda

2.

Full year results 2008

Appendix

3.

Market update

4.

Strategy update

5.

Outlook

1.

Overview

29

Outlook 2009

Ongoing tough market environment will lead to negative Q1 results:

Prices still haven't reached bottom line

Destocking delayed because of low apparent demand

Prepared for higher volume declines than expected by our clients sectors

Early and strict cost cutting measures already implemented

Strong liquidity position to bridge the recessionary gap

Creating financial headroom to take growth opportunities emerged during the crises

Business model works: strong cash flow generation in difficult times

Well prepared for a challenging year ahead!

30

Agenda

2.

Full year results 2008

Appendix

3.

Market update

4.

Strategy update

5.

Outlook

1.

Overview

31

Appendix

Table of contents

Financial calendar 2009 and contact details

Summary income statement Q4/FY 2008

Quarterly results and FY results 2008/2007/2006/2005

Current shareholder structureAcquisitions 2007/2008

Largest independent multi metal distributor

Steel cycle and EBITDA/cash flow relationship

Segment performance FY 2008Statement of cash flow

32

May 14: Q1 Interim ReportMay 26: Annual General MeetingAugust 13: Q2/H1 Interim ReportNovember 13: Q3 Interim Report

Financial calendar 2009 and contact details

Financial calendar 2009

Contact details Investor Relations Dr. Thilo

Theilen, Head of IR

Phone: +49 203 307 2050Fax: +49 203 307 5025E-mail: [email protected]: www.kloeckner.de

33

Largest independent multi metal distributor

Europe (2007)

Source:

company reports, own estimates

ArcelorMittal

(Distribution approx. 5%)

ThyssenKrupp

BE Group

Other

mill-tied

and independent distributors

11.1%

9.8%

6.4%

1.0%71.7%

Klöckner & Co

Source:

Purchasing Magazine (May 2008), own estimates

North America (2007)

Steel Technologies

Namasco (Klöckner & Co)

Ryerson Reliance Steel

Samuel, Son & Co

ThyssenKrupp Materials NA

Worthington Steel

Carpenter Technology

McJunkin

O'Neal Steel

Mac-Steel

A.M. Castle

4.2%

2.8%

2.2%

2.2%

1.0%1.0%0.9%

1.3%

1.2%1.1%

1.3%

1.8%

1.7%

1.0%

5.1%

Other

71.2%

Russel

Metals

Metals USA

Structure: 67% through distribution, service centersSize in value: ~€71–91bnCompanies: ~3,000 few mill-tied, most independent

PNA Group

Structure: 50-60% through distribution, service centersSize in value: ~€100bnCompanies: ~1,300 only independent distributors

34

Summary income statement Q4/FY 2008

(€m) Q42008

Q42007 Δ% FY

2008FY

2007 Δ%

Volume

(Ttons) 1,151 1,585 -27.3 5,974 6,478 -7.8Sales 1,394 1,492 -6.5 6,750 6,274 7.6Gross profit% margin

173 12.4

30020.1

-42.3-38.3

1,366 20.2

1,22119.5

11.93.6

EBITDA% margin

-134 -9.6

835.5

-262.1 -274.5

600 8.9

3715.9

62.0 50.8

EBITFinancial result

-152 -18

65-17

-334.6

6.2533

-70307-97

73.7

-28.2

Income before

taxes -171 48 -458.4 463 210 121.0Income taxes 29 -6 -559.7 -79 -54 47.9

Minority interests -15 4 -466.7 -14 23 -162.5

Net income -126 37 -439.4 398 133 198.5EPS € -2.72 0.80 -440.6 8.56 2.87 198.4Diluted EPS

€ -2.44 0.80 -410.3 8.11 2.87 182.9

35

Includes acquisition-related sales of €99m for 2008* in Europe and sales of €338m for 2008* in North America

EBITDA in Europe includes €259.5m net disposal gains

Segment performance FY 2008

(€m) Europe North America

HQ/Consol. Total

Volume

(Ttons)2008 4,317 1.657 - 5,9742007 4,612 1,866 - 6,478Δ

% -6.4 -11.2 -7.8Sales

2008 5,374 1,376 - 6,7502007 5,197 1,077 - 6,274Δ

% 3.4 27.8 7.6EBITDA

2008 377 148 75 600% margin 7.0 10.8 - 8.92007 326 65 -20 371% margin 6.3 6.0 - 5.9Δ

% EBITDA 15.5 130.4 n.a. 62.0* Sales of acquired companies for the first

twelve months of their consolidation

Comments

36

Statement of cash flow

(€m) FY2008

FY2007

Operating CF 386 328

Changes in net working capital -87 -105

Others -112 -114

Cash flow from operating activities 187 109

Inflow from disposals of fixed assets/others 388 38

Outflow from investments in fixed assets -316 -416

Cash flow from investing activities 72 -378

Proceeds from capital increase 0 62

Changes in financial liabilities -46 357

Net interest payments -37 -77

Dividends -40 -47

Cash flow from financing activities -123 295

Total cash flow 136 25

Operating CF covered the investments in net working capital

Investing CF mainly impacted by increased stake in Swiss Holding and acquisition of Temtco and Multitubes against the divestments of our Canadian subsidiary Namasco Ltd. and our Swiss subsidiary KVT

Comments

37

(€m) Q4 2008

Q3

2008

Q22008

Q12008

Q42007

Q32007

Q22007

Q12007

FY2008

FY2007

FY2006

FY2005*

Volume (Ttons) 1,151 1,348 1,755 1,720 1,585 1,601 1,663 1,629 5,974 6,478 6,127 5,868

Sales 1,394 1.773 1,922 1,660 1,492 1,583 1,650 1,550 6,750 6,274 5,532 4,964

Gross profit 173 390 462 340 300 286 328 307 1,366 1,221 1,208 987

% margin 12.4 22.0 24.0 20.5 20.1 18.0 19.8 19.8 20.2 19.5 21.8 19.9

EBITDA -134 413 212 109 83 93 103 92 600 371 395 197

% margin -9.6 23.3 11.0 6.6 5.6 5.9 6.2 5.9 8.9 5.9 7.1 4.0

EBIT -152 395 197 93 65 76 87 78 533 307 337 135

Financial result -18 -18 -17 -17 -17 -17 -52 -10 -70 -97 -64 -54

Income before taxes -171 378 180 76 48 59 35 68 463 210 273 81

Income taxes 29 -30 -55 -24 -6 -14 -12 -22 -79 -54 -39 -29

Minority interests -15 -4 3 2 4 8 4 6 -14 23 28 16

Net income -126 351 122 51 37 37 19 40 398 133 206 36

EPS basic (€) -2.72 7.56 2.63 1.09 0.80 0.79 0.41 0.86 8.56 2.87 4.44 -

EPS diluted (in €) -2.44 7.01 2.48 1.06 0.80 0.78 0.41 0.86 8.11 2.87 4.44 -

Quarterly results and FY results 2008/2007/2006/2005

*

Pro-forma consolidated figures for FY 2005, without release of negative goodwill of €139 million and without transaction costs of €39 million, without restructuring expenses of €17 million (incurred Q4) and without activity disposal of €1,9 million (incurred Q4).

38

Steel cycle and EBITDA/cash flow relationship

Comments

Klöckner & Co buys and sells products at spot prices generallySales increase as a function of the steel price inflation environmentCosts of material are based on historical average cost method for inventory and therefore lag the steel price increaseThis time lag creates accounting windfall profits (windfall losses in a decreasing steel price environment) inflating (deflating) EBITDAAssuming stable inventory volume cash flow is impacted by higher NWC needsThe windfall profits (losses) are mirrored by inventory book value increases (decreases)

Theoretical relationship*

Windfall

profits

Windfall losses

(€m)

Margin

Margin

12

3

4

4

5

6 6

*Assuming stable inventory volumes

Steel price SalesCost of material EBITDACash flow

39

Geographical breakdown of identified institutional investors

Current shareholder structure

Comments

Identified institutional investors account for 66%

UK based investors dominate (Franklin previously accounted for US share)

Top 10 individual shareholdings represent around 31%

100% Free floatRest of Europe

US

United Kingdom

Germany

France

Source: Survey

Thomson Financial (as of Feb. 09)

22%

4%

31%

21%

10%

11%

SwitzerlandRest of World

1%

40

Country Acquired Company Sales (FY)

Mar 2008 Temtco €226 millionJan 2008 Multitubes €5 million

2008 2 acquisitions €231 millionSep 2007 Lehner

& Tonossi €9 millionSep 2007 Interpipe €14 millionSep 2007 ScanSteel €7 millionAug 2007 Metalsnab €36 millionJun

2007 Westok €26 millionMay 2007 Premier Steel €23 millionApr

2007 Zweygart €11 millionApr 2007 Max Carl €15 millionApr 2007 Edelstahlservice €17 millionApr 2007 Primary Steel €360 millionApr 2007 Teuling €14 millionJan 2007 Tournier €35 million

2007 12 acquisitions €567 million2006 4 acquisitions €108 million

€141 million

€567 million

Acquisitions 2007/2008

12

42

2005 2006 2007

Acquisitions Sales

€231 million

2008

€108 million

2

41

Our symbol

the earsattentive to customer needs

the eyeslooking forward to new developments

the nosesniffing out opportunities

to improve performance

the ballsymbolic of our role to fetch

and carry for our customers

the legsalways moving fast to keep up with

the demands of the customers

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Disclaimer

This presentation contains forward-looking statements. These statements use words like "believes, "assumes," "expects" or similar formulations. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of our company and those either expressed or implied by these statements. These factors include, among other things:

o

Downturns in the business cycle of the industries in which we compete;o

Increases in the prices of our raw materials, especially if we are unable to pass these costs along to customers;

o

Fluctuation in international currency exchange rates as well as changes in the general economic climate

and other factors identified in this presentation.In view of these uncertainties, we caution you not to place undue reliance on these forward-looking statements. We assume no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.