Klöckner & Co- A Leading Multi Metal Distributor -

Roadshow PresentationJanuary 31, 2007

Dr. Thomas Ludwig Gisbert RühlCEO CFO

2

Klöckner & Co at a glance

Klöckner & Co highlights� Leading producer-independent steel and

metal distributor in the European and North American markets combined

� Distribution network with approx. 240 warehouses in Europe and North America

� About 10,000 employees

� Key pre-announced financials FY 2006

- Sales: �5,500 million

- EBITDA: �395 million

DistributorProducer Customer

Products:

Services:

Construction:� Structural

Steelwork� Building and civil

engineering

Machinery/Mechanical Engineering

Others:� Automotive� Metal products/

goods, installation� Durable goods� etc.

Overview

3

Distributor in the sweet spot

Suppliers SourcingProducts

and servicesLogistics/Distribution

Customers

� Sourcing in competitive sizes

� Strategic partnerships

� Frame contracts

� Global sourcing

� Leverage one supplier against the other

� No speculative trading

� One-stop-shop with wide product range of high-quality products

� Value added processing services

� Quality assurance

� Efficient inventory management

� Local presence

� Tailor-made logistics including on-time delivery within 24 hours

� More than 200,000 customers

� No customer with more than 1% of sales

� Average order size of �2,000

� Wide range of industries and markets

� Service more important than price

� Purchase volume p.a. of 6 million tones

� Diversified set of worldwide ca. 70 suppliers

� Examples:

Klöckner & Co�s value chain

Overview

4

Attractive product offerings combined with value added services

Overview

Broad range of products Value added Services

Long products Sectional steel/Tubes

Blanking/Flame & Plasma cuttingCut and slit from coilStainless and aluminumFlat steel

Cut to length/Mitre cut/Bending

Shot blasting/Priming/Conservation

5

Global reach with broad product and customer diversification

Germany/Austria 24%

France/Belgium 19%

Switzerland 14%

Spain 10%

UK 9%

Nether-lands 6%

Eastern Europe 1%

USA 10% Canada 7%

Steel-flat Products30%

Steel-long Products 32%

Tubes 9%

Special Steel/Quality Steel 9%

Aluminum 6%

Other Products 14%

Construction41%

Machinery/Manufacturing 15%

Automotive 7%

Appliances 7%

Other 30%

USA

CAD

USA

CAN

G 25 LocationsF 80 Locations CH 33 LocationsE 46 LocationsUK 24 LocationsIE 1 LocationNL 7 LocationsEastern Europe 4 LocationsCAN 5 LocationsUSA 18 Locations

Total 243 Locations

Locations

Country headquarters

Overview

Sales split by markets (2005)

Sales split by product (2005)

Sales split by industry (2005)

IE

6

Ow

ners

hip

Cor

pora

te d

evel

opm

ent

New ownership and management have repositioned Klöckner & Co

WestLB becomes majority shareholder of Klöckner & Co, together with HSH Nordbank

Period marked by shareholder conflicts

Dr. Thomas Ludwigrejoins as CEO

Gisbert Rühl joins as CFO

Refocus on operational excellence and growth

Overview

E.ON sells Klöckner & Co to the Balli Group

WestLB/HSH sell Klöckner & Co to Lindsay Goldberg & Bessemer (LGB)

IPOJune 28,

2006

2001 2003 2004 2005 20062002

Search for new ownership

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� Klöckner & Co is the leading independent distributor in the European and North American markets combined

� In Europe Klöckner Co is by far the largest independent distributor

� In North America Klöckner & Co has leading market shares in selected regions

� In Europe, the largest distributors are tied to a steel producer while in North America the players are independent (excl. ThyssenKrupp)

4.964.66

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2.151.77

1.47 1.45 1.37 1.29 1.16

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Competitive landscape - independent metals distributors

Top Independent Distributors inEurope & North America1, 2 Comments

Source: Purchasing Magazine (2006); Company information1) 2005 USD/ EUR exchange rate 0.8051, European Central Bank 2) Pro�forma for recent M&A activity

Market

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Regional landscape

Europe (2005) North America (2005)

Arcelor Mittal AM3S 12%

(Sales Distribution �3.2m = 5%)

ThyssenKrupp 8%

Corus 6.5%

Klöckner & Co 5.9%

Other Mill-Tied Distributors ~15-

25%

Other Independents

~45-55%

Klöckner & Co 6%

Corus 4%

Source: EuroMetal, Company reports, Klöckner & Co

Other72.5%

Ryerson5.0% Reliance Steel

4.4% Samuel, Son & Co.2.3%

ThyssenKrupp Materials NA

2.0%

Russel Metals1.9%

Worthington Steel1.6%

Metals USA1.3%

Carpenter Technology1.1%

PNA Group1.1%

McJunkin1.2%

O'Neal Steel1.4%

MacSteelService Centers

1.5%

Olympic Steel0.8%

AM Castle0.7%

Klöckner & Co 1

1.0%

1) Operates as Namasco in North AmericaSource: Purchasing Magazine (May 2006)

Market

Structure: 67% through distribution, service centersSize in value: ~�65�80bnCompanies: ~3,000 few mill-tied, most independent

Structure: 50-60% through distribution, service centersSize in value: ~�68-92bnCompanies: ~1,300 only independent distributors

Only independent in top tier

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Steel industry trends

Industry trends supporting Klöckner�s strategy

� Globalization and consolidation resulted in large costs savings, higher and more flexible capacity utilization, much better supply discipline and higher pricing power, which will prevent the margin destroying behaviour from the past

� Capacity and export containment in China under the drive of central government

� Higher material costs especially of iron ore and decreasingly relevant fixed costs have flattened the global steel cost curve in favour of developed-market steel producers

� Stable global demand growth leads to far quicker destocking and eroded global overcapacity

� On-going consolidation favouring large scale distributors

� Higher prices with much shorter downturns support more stable earnings and cash flows for distributors

Market

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Demand and price development

Demand

� Main steel-using sectors of the industry like construction, mechanical engineering and metal works retained a positive outlook especially in Germany

� Softer development of automotive and appliances expected

Prices

� Flat products: Price weakness has bottomed out. In Q1 07 prices are expected to be stable or slightly increasing because stocks have not been overbuilt and steady demand has continued. Pressure from third party import has soften because of increasing prices in China

� Long products: Recovery expected due to short winter slowdown

Europe

Market

Demand

� Non residential constructions markets remain strong, capital goods are steady at high levels, automotive week

Prices

� Flat products: Destocking and production cuts are moving in the right direction and will continue throughout Q1 07 Import pipeline beginning to ease because of narrowed steel price premium and the weak dollar

� Long products: Price are bouncing back after seasonal downturn as inventory levels are stable

North America

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Profitable growth

Strategy

Profitable growth through value-added distribution and services within multi metals to companies in Europe and North America

Grow more thanthe market

Continuous businessoptimization

1 Acquisitions driving market consolidation

2 Organic growth and expansion into new markets

3 STAR Program:- Purchasing- Distribution network- Inventory management

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Acquisitions driving market consolidation

Status Quo

1

Next steps

01/2007: Tournier�35 million sales; 41 employees

10/2006: Action Steel �55 million sales; 110 employees

10/2006: Gauss �10 million sales; 40 employees

07/2006: Aesga�18 million sales; 40 employees

02/2006: Targe�25 million sales; 50 employees

10/2005: Alu Menziken Service�33 million sales; 70 employees

07/2005: Reynolds�108 million sales; 150 employees

Further acquisitions in core markets at attractive valuations:

� Leverage existing structure with 10 to 12 smaller (local) bolt on acquisitions in 2007

� Medium and large scale acquisitions when appropriate

� Include attractive industries, e.g. oil and gas

Focus on targets in key markets at attractive valuations

Strategy

BenefitsSignificant synergy opportunities

� Streamlining operations, processes and sales force

� Integration of STAR

Economies of scale

� Stronger purchasing power

Strategy

� Attractive valuations

� Proven acquisition integration capability

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Organic growth and expansion into new markets2

Status Quo

� Strong growth in core markets above GDP partly as a result of the outstanding development of the construction and machinery industries

� Eastern European facilities established in Poland, Czech Republic, Romania and Baltic States

Next steps

Expansion of strong market positions in core markets:

� Selective extension of product range through development of specific products and customer specific solutions

� Increase value added services through investments in new processing capacity

� Extension of customer base through development of product management for specific customer groups

� Further geographic expansion in Eastern Europe by leveraging the existing network

Strategy

Leveraging existing distribution network

Strategy

Benefits Sustainable profitable growth

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Purchasing � Status Quo

� Close-down of warehouses in Northern Germany (3 0)

� Reduction number of warehouses in the Lyon area in France (8 4)

� Improvement warehouse structure in the Iowa-region in US (3 1)

� Restructuring of service center business in Switzerland (3 1)

3

Next steps

Business optimisation through STAR Program

Upside potential from STAR Program approx. �40 � �60 million until 2007 and a total of approx. �80 million until 2008

Distribution � Status Quo Next steps

� Continuous improvement of distribution network throughout the Group with support of the optimization-tool �Prodacapo� (activity based costing)

� Ongoing improvement in France and UK

� Project to restructure Spanish distribution network started

� Finalize implementation of SAP throughout the European organization (France, Switzerland)

� Implement unified article code

� Finalize central purchasing on country level, especially in Germany

� Establish European purchasing and increase sourcing from world-class suppliers with structural cost advantages

� Frame contracts with main suppliers

� Global sourcing

Strategy

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Strong development in 20061

197395

2005 2006

EBITDA(�m)

Net debt deleveraging 2

(�m)

Sales(�m)

375719

2005 2006

4,964 5,500

2005 2006

Fast deleveraging through strong operating cash flow and disposals of non-core assets

Sales increase driven by organic growth, acquisitions and favourable price development

1) Pre-announced2) 2005 incl. shareholder loan

Strong profitability growth through STAR program, volume and price development

+100%

+11%

-48%

Financials

16

Strong quarterly development in 20061

compared to 2005

48494654 70108104

74

05 Q1 06 05 Q2 06 05 Q3 06 05 Q4 06

EBITDA2

(�m)

Net debt deleveraging 3

(�m)

Sales(�m)

670482 435 375

Q1 06 Q2 06 Q3 06 Q4 06

1,2171,1911,348

1,2071,3661,3941,4181,323

05 Q1 06 05 Q2 06 05 Q3 06 05 Q4 06

Fast and constants deleveraging

Sales increase driven by volume and price increases

1) Pre-announced2) Adjusted by one-off effects (asset disposals): Q1 2006: about 5M� and Q3 2006: about 35M�3) Q1 2005 incl. shareholder loan

Strong profitability growth in Q2 and Q3 also driven by stock profits

Financials

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Financial Calendar 2007

Financial Calendar 2007 and Contact Details

Contact Details Investor Relations

Claudia Nickolaus, Head of IR

Phone: +49 (0) 203 307 2050Fax: +49 (0) 203 307 5025E-mail: claudia.nickolaus@kloeckner.deInternet: www.kloeckner.de

March 29: Full Year Results 2006; Analyst conference and Press conference

May 14: Q1 Interim Report

June 20: General Shareholders� Meeting

August 15: Q2 Interim Report

November 14: Q3 Interim Report

Contact

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Appendix

Financials Q3/9M 2006 and Shareholder Structure

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Summary Income Statement Q3/9M 2006

--3.27--1.64Earnings per Share in �

-34152--476Net income

-

-

-

64

-18

12

230

-55

23

-

-

-

-4

5

5

105

-20

8

Income before taxes

Income taxes

Minority interests

+171.2

-

104

-40

282

-52

+246.0

-

37

-41

128

-24

EBIT

Financial result

+118.1

-

1494.0

3257.9

+191.8-

494.1

14310.3

EBITDA% margin

+26.4-

72319.3

91422.1

+32.1-

23719.9

31322.5

Gross profit% margin

+ 10.33,7474,134+17.0 1,1911,394Sales

Ä%

9M

2005*

9M

2006Ä%

Q3

2005

Q3

2006

(�m)

* Pro-forma consolidated figures for 9 month 2005, without release of negative goodwill of �139 million and without transaction costs of �39 million

Financials

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Balance Sheet Q3 2006

957

719

1,203

435

Net Working Capital

Net financial debt

2,2562,637Total equity and liabilities

2,256

323

921

589

1,012

536

-

2,637

750

803

472

1,084

668

-

Total assets

Equity

Total long-term liabilities

- thereof financial liabilities

Total short-term liabilities

- thereof trade payables

Other liabilities

595

694

800

80

87

548

862

1,009

143

75

Long-term assets

Inventories

Trade receivables

Cash & Cash equivalents

Other assets

Dec. 31

2005

Sept. 30

2006

(�m) Comments

Financial debt as of September 30, 2006:

� Outstanding HYB: �170 million

� Net financial debt: �435 million (from �719 million)

Equity:

� Conversion shareholder loan: �165 million

� IPO: capital increase �98 million

� Strong earnings

� Equity ratio 28% (from 14%)

Net Working Capital:

� Increase in line with the additional sales

Rating:

� Standard & Poor�s: �BB� with stable outlook

Financials

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Cash flow statement

9M

2005*

9M

2006

(�m)

* Pro-forma consolidated figures for the first 9M 2005

� Strong business development reflected in positive CF deriving from operational activities and increased NWC requirements

� Investing CF 9M 2006 mainly includes:

- cash inflow from real estate disposals and the sale of non core activity AVZ

- cash outflows mainly due to acquisitions of Targe and Aesga

Comments

16

-119

230

-26

-12

89

142

98

-

-73

-26

-6

-7

65

Proceeds from capital increase

Net impact of change of financing

Changes in financial liabilities

Net interest payments

Dividends

Cash Flow from financing activities

Total Cash Flow

18

-47

-29

101

-41

60

Inflow from disposals of fixed assets/others

Outflow from investments in fixed assets

Cash Flow from investing activities

149

40

-107

82

287

-268

-7

12

From operational activities

Changes in net working capital

Others

Cash Flow from operating activities

Financials

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IPO on 28 June 2006 followed by free float increase

IPO Highlights

Issue price: �16 per share

Offer Size: �264 million; of which Klöckner received �104 million gross proceeds from the capital increase

Placement: 16.5 million shares (in total 46.5 million shares); thereof:

� 6.5 million new shares from a capital increase

� 10 million from the selling shareholder Lindsay Goldberg & Bessemer (via Multi Metal Investment S.à.r.l.)

Current shareholder structure

January 2007 sell-down� LGB/Management 15.5%� Free float 84.5%

October 2006 sell-down� LGB/Management 45.0%� Free float 55.0%

Post-IPO� LGB/Management 65.0%� Free float 35.0%

� Mainly large European Institutional Investors� Increasing share of US Investors� Growing share of Retail Investors

Shareholder Structure

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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

climateand 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.

Disclaimer

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Symbol