Klöckner & Co - Capital Market Days 2009

October 6, 2009

Klöckner & Co SE

Capital Market Days 2009

Looking back and ahead How Klöckner & Co positioned itself for

profitable growth

Gisbert Rühl, CFO

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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:

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

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

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.

This presentation is not an offer for sale or a solicitation of an offer to purchase any securities of Klöckner & Co SE or any of its affiliates ("Klöckner & Co").

Securities of Klöckner & Co, including, but not limited to, rights, shares and bonds, may not be offered or sold in the United States or to or for the account or benefit of U.S. persons (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act")) unless registered under the Securities Act or pursuant to an exemption from such registration.

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Where are we coming from?

IPO Roadshow Presentation June 2006 IPO

35%

4

What was the strategy at IPO?

IPO Roadshow Presentation June 2006

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What did we achieve after the IPO?


35%

• Acquisition of 18 companies• Initiation of STAR

Ulrich Becker joined Klöckner & Co

2007 2008

3 sell downs65%

CB€325m

Lehman

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We followed our growth strategy

IPO Analyst Presentatio

n June 2006

Roadshow Presentation September 2

008

Successful acquisition and integration of 18 companies

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We initiated the improvement program STAR

Roadshow Presentation September 2

008

IPO Analyst Presentatio

n June 2006

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How did we react on the financial crisis?


35%

2007 2008 2009

Crisis managementCosts - debt - financing

3 sell downs65%

Lehman

CB€325m

CB€98m

RI€200m

Refocus ongrowth



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Immediate reaction in two waves

Crisis management

Cost cutting

NWC-/ Debt-Reduction

Safeguard financing

Waves 1 and 2

Efficiency program continuous improvement

1. Wave launched in Q4 2008

2. Wave launched in March

2009

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€35-40m fixed cost savings in 2009, annualized fixed cost savings of €50-60m

Cost cutting: Saving target >€100m for 2009

€100m net savings target 2009

Personnel 50%

Shipping 20%

Operating supplies/ tools

15%Repair/

maintenance 10%

Other 5%

Reduction of >1,500 jobs or >15% of total workforce

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NWC-/debt-reduction: Fast adaptation to current situation

Destocking

Q1/2008 Q2/2008 Q3/2008 Q4/2008 Q1/2009 Q2/2009

NWC

€bn

Net debt Stock to shipment

Q1/2008 Q2/2008 Q3/2008 Q4/2008 Q1/2009 Q2/2009

€bn

0.69

1.07

0.570.32

0.12

0.90

Q1/2008 Q2/2008 Q3/2008 Q4/2008 Q1/2009 Q2/2009

Stock levels of KCO in million to

0.89

1.32 1.251.011.21

0.75

Q1/2008 Q2/2008 Q3/2008 Q4/2008 Q1/2009 Q2/2009

Stock to quarterly shipment ratioTurnover in million to

1.07

1.76

1.351.15

1.72

1.05

0.70 0.750.93

0.710.87 0.83

1.401.65

1.01

1.721.41

0.78

-43% -55%

-89%

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Safeguarding financing: Early adoption…

Scenarios in Q1 2009 were indicating possibleproblems with credit covenants

Roadshow Presentation April

2009


2009

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Financial structure

Bank debt Securitized debt

Capital markets debt

AcquisitionsNWC

43%

26%

31%

€325mConvertible Bond 2007

€400mBilateral Facilities

€505mABS

€300mSyndicated

Loan

€98m Convertible Bond 2009

…led to successful restructuring of financial structure

€1.6bn facilities without performance covenants


2009

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After managing the crisis back on track with Wave 3

Crisis management Managing growth again

Cost cutting

NWC-/ debt-reduction

Safeguard financing

Waves 1 and 2

Wave 3

Efficiency program Continuous improvement

Acquisition strategy

Organic growth

Growth capital

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Financial structure



AcquisitionsNWC

43%

26%

31%



€505mABS

€300mSyndicated

Loan


Funds for future growth

€193mRightsIssue

€938mEquity

pre Rights Issue

> €600m predominantly for growth through acquisitions

€1,131m €616m

Strong financial power for growth through acquisitions

Equity

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Achieve profitable growth

Strengthen purchasing power vs. suppliers for core group products

Strengthen country specific market positions

Expand footprint outside construction industry

Focus on geographical core markets in EU, NA and EEC to leverage existing network

Western Europe

NAFTA

Steel ProducerSteel Distributor

Steel DistributorTop 6 -20

Top 5

65%17%

18%Others

Top 5

31%

69%

Steel ProducerOthers

Top 5

39%

61%

OthersOthersTop 6 -20

Top 5

18%

32%50%

Significant acquisition potential in fragmented markets

Source: Company data, Eurometal, broker research

Consolidation among steel producers is well ahead of highly fragmented distribution sector M&A strategy

Profitability above group averageStrong synergy potential in purchasing, admin and warehousing with low integration riskEV/EBITDA multiple between 4x and 6x EBITDA EPS-accretive from year one

Target selection criteria

Track record of 18 successful acquisitions since IPO shows ability to integrate companies and extract synergies

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Leading producer-independent multi-metal distributor

Source: Public information Note: Average exchange rate $/€ 2008: 0.6831 Includes complete Steel Solutions and Services 2 Mill-tied distributors

Largest independent multi-metal distributor

Independence provides:- Sourcing flexibility- Ability to obtain steel at market prices, even in tight

markets- Better ability to react to changes in supply and

demand, as products are sourced from a variety of suppliers

- Mill-tied distributors competing against customers of the mills

2008 European competitive landscapeEurope: ~3,000 market participants

Sales 2008 in €bn

0

4

8

12

16

AM3S TKM Klöckner& Co

RelianceSteel

Ryerson McJunkinRedman

1,2 2

Mill-tied distributors¹

Other independent distributors²

62%38%

Source: Eurometal (2009), public information, based on turnover in tons 1 Top 3 mill-tied distributors ArcelorMittal/ ThyssenKrupp/ Corus ² Klöckner & Co is largest independent distributor

2008 North American competitive landscapeNorth America: ~1,200 market participants

Mill-tied distributors

Rank Company Mkt. Share

1 Reliance Steel 5.7%

2 Ryerson Inc 3.5%

3 McJunkin Red Man 2.6%

4 Samuel, Son & Co. 2.1% … 10 Klöckner-Namasco 1.2%

11 A.M. Castle & Co 0.9%

…

Top 15 combined 28.2%

Other independent

distributors

Top 15

28.2%

63.7%

8.1%

Source: Metal Center News (Sept. 2009), Purchasing Magazine (April 2009), based on sales

15.8

10.4

3.66.7 6.0

2.9

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Financial structure



AcquisitionsNWC

43%

26%

31%



€505mABS

€300mSyndicated

Loan


Funds for future growth

> €1,200m predominantly for organic growth

Strong financial power for organic growth

€1,205m

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Significant further improvement potential

SalesSourcing Warehousing/ Distribution

Centralization of specific procurement 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

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Optimization of distribution network

Know-how, market competences and

services required to develop producer

alignment and customer benefit at

the same time

Expand geographic reach, as

distribution has to be close to

the customers also to ensure core product market coverage with limited Capex

Footprint optimization

Services linked with logistics require critical mass and

process standards to ensure efficiency and cost-leadership

in the system

The system requires volume – to realize

„Economies of scale“

European access to the entire network

Know-how Footprint Processes Scale

Preconditions to achieve cost and price leadership:

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One layer distribution structureuntil 2008

Two layer distribution structure with satellites starting 2009

Cross-Dock

All warehouses offer a complete assortment to the local customersOptimization of stock only possible on warehouse levelSimple and direct delivery system

Regional or central warehouse with A and B-articles

Steel mill

Full assortment warehouse

customer

New warehouse structure to optimize logistics and stocks

Optimization of stock for all warehouses of one regionA-articles (= fast mover) are available in local warehousesRegional or central stock offer a complete assortment Transport through intelligent logistic system

Steel mill

Local warehouse with A-articles

Customer

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Scale effects through more centralized procurement

central - decentral Advantages of the IPM organization

Negotiation power Bundling of purchasing volumes on Group level

Optimization of stocks Optimal allocation of procured volumes to KlöCo warehouses; enforcement of intercompany business; basis unified system

Supplier loyalty IPM is „one-face-to-the-supplier“

Flexibility/ speed Decentral disposition to react quickly to the local market situations

Purchasing know-how Keep the closeness to the local markets

Optimal organization = new Klöckner & Co organization Historical Klöckner & Co organization

Benefiting from both – centralized and decentralized functions

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What you can expect from Klöckner going forward

IPO35%


2007

3 sell downs65%

2006 2008

CB€325m


2009

Crisis managementCosts - debt - financing

CB€98m

RI€200m

Refocus ongrowth

2010

Thomas Ludwig resigns Gisbert Rühl new CEO

Grow more thanthe market through accretive and more sizable acquisitions

Continuous businessoptimization through extended centralized sourcing, optimized logistics and standardized processes

Lehman

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We stick to our targets


2006

Underlying sales growth

Underlying EBITDA margin

Gearing (Net financial debt/Equity)

> 10% p.a.

> 6%

< 75%

Starting 2010

Starting 2011

Revised

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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

Klöckner & Co - Capital Market Days 2009

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