Gisbert RühlCFO

Klöckner & Co

A Leading Multi Metal Distributor

RoadshowNovember, 2007

2

Agenda

2. Update on recent developments

3.

Financials

Appendix

1.

Overview, market and strategy

3

Klöckner & Co at a glance

CustomerKlöckner & Co

Klöckner & Co highlights

Products:

Services:

Producer

Construction:Structural SteelworkBuilding and civil engineering

Machinery/MechanicalEngineering

Others:AutomotiveMetal products/ goods, installationDurable goodsetc.

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

Distribution network with approx. 250 warehouses in Europe and North America

About 10,000 employees

Key financials FY 2006- Sales: €5,532 million- EBITDA: €395 million

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

> 200,000 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 suppliersExamples:

Klöckner & Co’s

value chain

5

CDN

B D

F

E

CH ACZ

PL

LT

RO

NL CN

USA

GBIRL

Global reach with broad product and customer diversificationAbout

250 locations

CDN 5 LocationsUSA 28 Locations

D 25 LocationsF 76 LocationsCH 31 LocationsE 48 Locations

GB 25 LocationsIRL 1 LocationNL 7 LocationsEastern Europe 11 Locations

BU

6

Global reach with broad product and customer diversification

Customer

diversification

(2006)

Other

GB

Construction

Machinery/Manufacturing

Auto- motive

40%

20%5%

35%23%

21%

15%

10%

9%

6%1%

10%Germany/

Austria

France/Belgium Spain

Nether- lands

Eastern Europe

USA (incl. Primary

17%)

Switzerland

Canada

5%Steel-flat Products

Steel-long Products

Tubes

Special and

Quality Steel

Aluminum

Other Products

28%

31%9%

10%

8%

14%

Sales split by industry Sales split by markets Sales split by product

7

North America (2006)

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

Europe (2006)

Structure: 67% through distribution, service centersSize in value: ~€70–90bnCompanies: ~3,000 few mill-tied, most independent

Strong position in Europe; Acquisition of Primary significantly improved position in NA

Source: Purchasing Magazine (May 2007)Source: EuroMetal, company reports, own estimates

ArcelorMittal (Distribution approx. 5%)

ThyssenKrupp

Corus

Other independents

Other mill-tied

distributors

Klöckner & Co

Olympic Steel

Namasco (Klöckner & Co)

Ryerson

Other

Reliance Steel

Samuel, Son & CoThyssenKrupp Materials NA

Russel Metals

Worthington Steel

Metals USA

Carpenter Technology

PNA Group

McJunkin

O'Neal Steel

Mac- Steel

AM Castle 72.5%

Namasco with Primary approx. 1.4%

11%

8%

7%

4%~ 45-

55%

~ 15-

25%

4.5%

2.5%

2.1%

1.8%

0.9%0.9%0.8%

1.4%

1.3%1.2%

1.3%

1.8%

1.4%

1.0%

4.7%

8

Country Acquired Company SalesSep 2007 Lehner & Tonossi €9 millionSep 2007 Interpipe €14 millionSep 2007 ScanSteel €7 millionAug 2007 Metalsnab €36 millionJun 2007 Westok €26 million

May 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 Ytd 12 acquisitions €567 million2006 4 acquisitions €108 million2005 2 acquisitions €141 million

Accelerating numbers of acquisitions

12

42

2005 2006 2007

Number Sales

€141 million€108 million

€567 million

1

Acquisitions

9

Strong acquisition criteriaFurther acquisitions in core markets and Eastern Europe:

• Leverage existing structure in core markets with small- and mid-size bolt-on acquisitions

• Large scale acquisitions when appropriate• Acquisitions in Eastern Europe to increase footprint

Focus on targets in 3 directions:• Expansion of geographic reach• Extension of customer base• Extension of product portfolio

Focus on targets at attractive valuations:• EV/EBITDA multiple between 4x and 5x for smaller

acquisitions• EV/EBITDA multiple between 5x and 6x for mid-size and large

scale acquisitions

Focus on targets with significant synergy and scale effects:• Stronger purchasing power • Streamlining operations and processes, integrating IT• Integration of STAR

Accretive growth

1

10

Efficient acquisition processApproach

• Existing local contacts to competitors• Pro-active contact via M&A advisors• External contacts (seller, M&A advisors, banks, etc.)

Selection of acquisition targets• Targets must fulfil acquisition criteria

Handling of

acquisition projects • Depending on size and complexity of the deal and

experience of the country management the process is either run locally or lead by the headquarters

• Duration of the projects between 3 to 6 months (first contact to completion)

• Due diligence is focussed on the areas of finance, sales/ marketing, logistics/distribution/stocks, personnel and legal/environmental

CountryOrganization

Group

Joint effort

Size of the project

Com

plex

ity o

f the

pro

ject

Process run by…

1

11

Growth above GDP in core markets partly as a result of the outstanding development of the construction and machinery/mechanical engineering industries and steel prices

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

Acquisition of Metalsnab in Bulgaria

Evaluation of market entry in Slovakia, Turkey and Russia

Organic growth and expansion into new markets2

Status quo Next steps

Expansion of strong market positions in core markets:

Selective extension of product range Increase value-added services throughinvestments in new processing capacityOpening of new branches in EasternEurope

Leveraging existing distribution network

Sustainable profitable growth

Strategy

Benefits

12

Next steps

STAR: Status quo H1 2007 and next steps3

Status quo

Increase sourcing from world-class suppliers with structural cost advantagesEstablish European sourcing (STAR Phase II)

Additional frame contracts with main suppliersExtended global sourcing from third party countriesImplementation of new organization in Germany almost completedImplementation of a software supporting stock management

Purchasing

Improved performance as a result of restructureddistribution networkStart of roll-out of the optimization tool “Prodacapo”(activity based costing) in Spain, UK and Eastern European Countries

Continuous improvement of distribution network throughout the Group with support of the optimization-tool “Prodacapo”

- Ongoing roll-out throughout European countries- Restructuring of warehouse structure in Spain,

France and UKFinalize implementation of SAP throughout the European organization (France, Switzerland) and interface SAP with “Prodacapo”

Distribution

13

Phase II (2008 onwards)

STAR: Phase I finalized in 2008, further potential in phase II3

Phase I (2005 -

2008)

Overall targets:Central purchasing on country level, especially in GermanyImprovement of distribution networkImprovement of inventory management

2006: ~ €20 million2007: ~ €40 million2008: ~ €20 million

~ €80 million

Upside potential

Overall targets:European SourcingOngoing improvement of distribution network

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Agenda

2. Update on recent developments

3.

Financials

Appendix

1.

Overview, market and strategy

15

Overall at least stable demand; strong demand from construction and mechanical engineering in Europe

At least firm price development for carbon steel .

Downward trend over the coming months for stainless steels due to the fall of the nickel price

Overall stable demand and healthy margins

Expectations versus recent developments

Expectations for H2 2007

Overall satisfactory demand without being strong; construction softer than expected .

Prices softening in Q3; announced and expected price increases for Q4 will probably not materialize

Sharp drop of the nickel price translated in strong price decline of stainless steels .

Increasing pressure on margins, especially regarding stainless steels

Recent developments

16

Consequences for Klöckner & Co

Overall lower margins than expected, especially for stainless

Unlike previous year, no stock gains at all

Volumes satisfactory but partially lower than expected

Additional effects because of weaker USD and CHF

Revised guidance for 2007

Reported EBITDA approximately 10% below the reported 2006 level of €395 million (including one-offs in each case)

Details to be given during Q3 conference call

17

Market expectations for Q4 2007

EuropeSlight improvement in stock levelsOverall healthy sales activity, without being strongPrices overall expected to remain flat

North AmericaFurther declining importsCompletion of the most recent phase of destockingRelatively soft demand for flat, stronger for long productsModerate price recovery possible

Q4 2007

Q4 2007 will not balance the weakness of Q3

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Market expectations for 2008

Rising steel prices in 2008 by a two-digit percentage due to expected raw material hikes (iron ore and coking coal)*

Expected increase of apparent steel use in EU-27 1.4%, other Europe 5.7% and North America 4%; World 6.8%*

Continuing lower imports from China because of rising raw material prices, environmental and energy constraints as well as possible anti-dumping actions

2008

Again positive development in 2008 expected

* According to International Iron & Steel Institute

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Conclusion for Klöckner & Co

Acquisitions driving market consolidation

Organic growth and expansion into new markets

STAR Program

Continuation of growth strategy and optimization!

Targets and strategy remain unchanged

1

2

3

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Agenda

2. Update on recent developments

3.

Financials

Appendix

1.

Overview, market and strategy

21

Summary income statement H1 2007

(€m) H1 2007

H1 2006 Δ%

Sales 3.199 2,741 +16.7

Gross profit% margin

63519.8

60121.9

+5.6-9.6

EBITDA% margin

1956.1

1836.7

+6.4-8.9

EBITFinancial result

166-63

154-28

+7.7-

Income before

taxes 103 126 -

Income taxes -33 -35 -

Minority interests 10 15 -

Net income 59 76 -

EPS

€ 1.28 1.63 -

Comments

Strong sales growth driven by higher price levels and acquisitions

Further improved gross profit and EBITDA; lower %-margins because of higher price levels

Financial results negatively impacted by one time effects of 38 €m for the redemption of the HYB

22

Balance sheet H1 2007

(€m) June 30, 2007

December 31, 2006

Long-term assets 768 579Inventories 1,095 841Trade receivables 1,212 933Cash & Cash equivalents 74 130Other assets 85 69Total assets 3,234 2,552Equity 714 799Total long-term liabilities 1,277 744

- thereof financial liabilities 936 416Total short-term liabilities 1,243 1,009

- thereof trade payables 776 639Other liabilities - -Total equity and liabilities 3,234 2,552Net working capital 1,531 1,135Net financial debt 996 365

Comments

Financial debt as of June 30, 2007:• Syndicated loan: €517million• ABS: €339 million• Bank borrowings: €190 million• Increased net financial debt due to

acquisitions and higher NWC

Equity:• Decrease driven by increase of

stake in Swiss Holding and dividend distribution

• Further, equity ratio decreased due to higher assets from 31% to 22%

Net Working Capital:• Increase driven by sales, higher

price levels and acquisitions

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Statement of cash flow H1 2007

Comments(€m) H12007

H12006

Operating CF 188 179

Changes in net working capital -303 -186

Others -25 -3

Cash flow from operating activities -140 -10

Inflow from disposals of fixed assets/others 15 34

Outflow from investments in fixed assets -366 -16

Cash flow from investing activities -351 18

Proceeds from capital increase - 101

Changes in financial liabilities 531 61

Net interest payments -51 -19

Dividends -45 -6

Cash flow from financing activities 435 137

Total cash flow -56 145

Strong business development reflected in positive cash flow deriving from operational activities and increased NWC requirements

Investing cash flow in H1 2007 mainly impacted by cash outflow due to the various acquisitions and increased stake in our Swiss Holding

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November 14: Q3 Interim Report2008April 1: Full Year Results 2007

May 15: Q1 Interim Report

June 20: Annual General Meeting

August 14: Q2 Interim Report

November 14: Q3 Interim Report

Financial calendar 2007/2008 and contact details

Financial calendar 2007/2008

Claudia Nickolaus, Head of IR

Phone: +49 203 307 2050

Fax: +49 203 307 5025

E-mail: claudia.nickolaus@kloeckner.de

Internet: www.kloeckner.de

Contact details Investor Relations

25

Agenda

2. Update on recent developments

3.

Financials

Appendix

1.

Overview, market and strategy

26

Appendix

Table of contents

Quarterly results and FY results 2006/2005

Debt facilities

Steel cycle and EBITDA/cash flow relationship

27

(€m) Q2

2007

Q12007

Q42006

Q32006

Q22006

Q12006

FY2006

FY2005*

Sales 1,650 1,550 1,398 1,394 1,418 1,323 5,532 4,964

Gross profit 328 307 294 313 316 285 1,208 987

% margin 19.8 19.8 21.0 22.5 22.3 21.5 21.8 19.9

EBITDA 103 92 70 143 104 79 395 197

% margin 6.2 5.9 4.9 10.3 7.3 6.0 7.1 4.0

EBIT 87 78 55 128 89 64 337 135

Financial result -52 -10 -12 -24 -14 -14 -64 -54

Income before taxes 35 68 43 105 75 50 273 81

Income taxes -12 -22 16 -20 -22 -13 -39 -29

Minority interests 4 6 5 8 9 6 28 16

Net income 19 40 54 76 45 31 206 36

Earnings per share in € 0.41 0.86 1.16 1.64 0.97 - 4.44 -

Quarterly results and FY results 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).

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Debt facilities

(€m) Old debtstructure

Change indebt structure

New debtstructure

ABS Europe 380 +40 420

ABS USA 60 +30 90

Total 440 +70 510

Syndicated loan - +600 600

Bilateral credit agreements 480 -100 380

Total senior bank facilities 480 +500 980

Convertible bond - +325 325

High yield bond 170 -170 -

Total facilities 1,090 +725 1,815

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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 environmentCost of material are based on an 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

30

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:

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.