Klöckner & Co AG reported financial results for Q3 and 9M 2007 that were lower than expected due to weaker steel price development and declining demand. EBITDA for 9M 2007 was €288 million, 10% below 2006 levels. The company revised full-year 2007 EBITDA guidance to be approximately 10% below 2006. Despite challenges, the company achieved its target of 12 acquisitions for 2007 and its business optimization program "STAR" remained on track. Market conditions in Q4 2007 and Q1 2008 were expected to be difficult but show signs of improvement.

1. November 14, 2007
Dr. Thomas Ludwig Gisbert Rühl
CEO CFO
Klöckner & Co AG
- Q3/9M 2007 Results -
Analysts’ and Investors’ Conference Call

2. 2
Agenda
1. Highlights Q3/9M 2007, market and strategy
Dr. Thomas Ludwig, CEO
2. Financials Q3/9M 2007 and outlook
Gisbert Rühl, CFO
Appendix

3. 3
Ongoing profitable growth
Highlights 9M 2007 and until today
 Strong results impacted by overall weaker steel price development in Q3
 Revised guidance for 2007 confirmed
 Business optimization program “STAR” fully on track
 Target of 12 acquisitions achieved
 Further optimization of financing:
 Successful placement of €600 million Multi-Currency Revolving Credit Facility
 Successful issuance of €325 million Convertible Bond
 Full redemption of high yield bond
 Free float of 100%

4. 4
Financial highlights Q3/9M 2007
242
288
4,783
4,893
9M
2007
128
143
1,394
1,467
Q3
2006
-14.3282-40,876EBIT
-11.5325-34,793EBITDA
+15.74,134+13.61,583Sales
+4.74,674+9.11,601
Volume
(Ttons)
Δ%
9M
2006
Δ%
Q3
2007
(€m)

5. 5
 Overall at least stable demand; strong
demand in construction and mechanical
engineering in Europe
 At least firm price development for carbon
steel
.
 Downward trend 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 Recent developments
 In Europe overall good demand without
being strong; construction softer than
expected; weaker demand in North America
 Prices softening in Q3; announced and
expected price increases for Q4 will not
materialize
 Sharp drop of the nickel price translated in
strong price decline of stainless steels
.
Increasing pressure on margins, especially
regarding stainless steels

6. 6
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 negative 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)
Results lower than expected but still strong

7. 7
Market expectations for Q4 2007
 Europe
 Slight improvement in stock levels
 Overall healthy sales activity, without being strong
 Prices overall expected to remain flat
 North America
 Further declining imports
 Completion of the most recent phase of destocking
 Relatively soft demand for flat, stronger for long products
 Moderate price recovery possible
Q4 2007
Q4 2007 will not balance the weakness of Q3

8. 8
Market expectations for Q1 2008
 Overall, especially in North America*, increasing prices expected due to
 Increase in iron ore prices
 Seasonally high demand
 Low imports from China at least until spring
 High freight rates
 Overall lower stock levels, especially in North America
Q1 2008
Promising start in 2008 expected
* According to CRU in North America US$60-70 per ton for sheets

9. 9
Market expectations for FY 2008
Rising steel prices in 2008 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, high
taxes and shipping costs, environmental and energy constraints as well as
possible anti-dumping actions
FY 2008
Again positive development in 2008
* According to International Iron & Steel Institute

10. 10
Profitable growth
Grow more than
the market
Continuous
business
optimization
1 Acquisitions driving
market consolidation
Organic growth and
expansion into new
markets
2
3 STAR Program:
- Purchasing
- Distribution network
Profitable growth
through value-added
distribution and services
within multi metals to
companies in Europe
and North America
Profitable growth
through value-added
distribution and services
within multi metals to
companies in Europe
and North America

11. 11
€9 millionLehner & TonossiSep 2007
€14 millionInterpipeSep 2007
€7 millionScanSteelSep 2007
€36 millionMetalsnabAug 2007
€108 million4 acquisitions2006
€567 million12 acquisitions2007 Ytd
€35 millionTournierJan 2007
€14 millionTeulingApr 2007
€360 millionPrimary SteelApr 2007
€17 millionEdelstahlserviceApr 2007
€15 millionMax CarlApr 2007
€11 millionZweygartApr 2007
€23 millionPremier SteelMay 2007
€26 millionWestokJun 2007
€141 million
Sales
2005
Acquired CompanyCountry
2 acquisitions
Accelerating number of acquisitions
12
4
2
2005 2006 2007
Number Sales
€141 million
€108 million
€567 million
1
Acquisitions

12. 12
Expanded businesses in Eastern Europe:
 Acquisition of Metalsnab in Bulgaria
 Organic growth through Greenfield
approach, e.g. South of Poland and Romania
 Evaluation of market entry in other countries
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 through
investments in new processing capacity
 Further acquisitions and opening of new
branches in Eastern Europe
Leveraging existing distribution network
Sustainable profitable growth
Strategy
Benefits

13. 13
Next steps
STAR: Status quo Q3/9M 2007 and next steps3
Status quo
 Establish European sourcing (STAR Phase II)
 Increase sourcing from world-class suppliers with
structural cost advantages
 Implement unified article codes
 Additional frame contracts with main suppliers
 Extended global sourcing for third party countries
 Implementation of new organization in Germany
(January 1, 2007) almost completed
 Implementation of a software supporting sales
and stock management
Purchasing
 Improved performance as a result of restructured
distribution network (warehouses)
 Start of roll-out of the optimization tool “Prodacapo”
(activity based costing) in Spain, UK, France and
Eastern European Countries
 Continuous improvement of distribution network
throughout the Group with support of the
optimization-tool “Prodacapo”
 Finalize implementation of SAP throughout the
European organization (France, Switzerland) and
interface SAP with “Prodacapo”
Distribution network

14. 14
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 Germany
 Improvement of distribution network
 Improvement of inventory management
2006: ~ €20 million
2007: ~ €40 million
2008: ~ €20 million
~ €80 million
Upside potential
Overall targets:
 European Sourcing
 Ongoing improvement of distribution
network

Upside potential
2008 ~ €10 million
2009: ~ €30 million
2010: ~ €20 million
~ €60 million

15. 15
Targets 2007 / Achievements in the first 9M 2007
Acquisitions: 10 – 12
Organic growth:
Min. 2.5% = €140 million
STAR program:
Additional €40 million EBITDA
Expansion:
New branches in Eastern Europe:
- Romania
- Poland
- Czech Republic
- Baltic States
Targets 2007 Achievements Q3/9M 2007
1
2
3
4
Acquisitions: 12 in 9 months
Organic growth:
9% before acquisitions
STAR program:
On track
Expansion:
Acquisitions and new branches in Eastern
Europe:
- Acquisition of Metalsnab, one of the
leading distributors in Bulgaria
- Opening of new warehouse in Southern
Poland
1
2
3
4

16. 16
Agenda
1. Highlights Q3/9M 2007, market and strategy
Dr. Thomas Ludwig, CEO
2. Financials Q3/9M 2007 and outlook
Gisbert Rühl, CFO
Appendix

17. 17
Summary income statement Q3/9M 2007
+4.74,6744,893+9.11,4671,601Volume (Ttons)
3.272.071.640.79EPS €
-230162-10559Income before taxes
--55-47--20-14Income taxes
-2319-88Minority interests
2.07
96
242
-80
288
6.0
921
19.2
4,783
9M
2007
0.78
37
76
-17
93
5.9
286
18.0
1,583
Q3
2007
-3.27-1.64Diluted EPS €
-152-76Net income
+0.7
-13.1
914
22.1
-8.6
-20.0
313
22.5
Gross profit
% margin
128
-24
143
10.3
1,394
Q3
2006
-14.3
-
282
-52
-40.7
-
EBIT
Financial result
-11.5
-24.1
325
7.9
-34.7
-42.7
EBITDA
% margin
+15.74,134+13.6Sales
Δ%
9M
2006
Δ%(€m)

18. 18
Strong underlying EBITDA improvement driven by STAR
Underlying EBITDA 9M 2007
+39235274Underlying EBITDA excluding Acquisitions
-13-5-18● Acquisitions (LTM*)
240
286
-35
-15
-1
5
325
40
9M
2006
-30
+35
+28
+8
+13
255
-
13
7
18
Operating EBITDA
● Windfall effects
● carbon and others
● stainless
● Exchange rate effects
● Special expense effects
+52292Underlying EBITDA
-37
-7
288
33
EBITDA as reported
● One-offs (mainly sale real estate)
Δ
9M
2007
(€m)
* LTM: Last twelve months

19. 19
Segment performance 9M 2007
Comments
 Sales for 9M 2007* in Europe
including about
- €16.1 million from Westok (UK)
- €8.2 million together from Max
Carl and Zweygart (D)
- €7.8 million from
Edelstahlservice (D)
- €9.6 million from Teuling (NL)
- €27.4 million from Tournier (F)
- €6.5 million from Gauss (CH)
- €9.1 million from Aesga (E)
 Sales for 9M 2007* in North
America including about
- €7.8 million from Premier Steel
- €150.1 million from Primary
Steel
- €39.3 million from Action Steel
4,783
-
794
3,989
Sales
9M 07
-11.532528815.74,134Total
--37-24--
HQ /
Consol.
-21.1635020.7658
North
America
-12.529926214.73,476Europe
Δ %
EBITDA
9M 06
EBITDA
9M 07
Δ %
Sales
9M 06
(€m)
* Sales of companies acquired in the last
twelve months

20. 20
Balance sheet as of Sept. 30, 2007
877
1,461
3,170
-
716
1,136
881
1,221
813
3,170
113
130
1,096
1,081
750
September
30, 2007
933Trade receivables
841Inventories
579Long-term assets
130Cash & Cash equivalents
69Other assets
639- thereof trade payables
-Other liabilities
1,009Total short-term liabilities
744Total long-term liabilities
799Equity
2,552Total assets
416- thereof financial liabilities
December
31, 2006
(€m)
2,552Total equity and liabilities
365Net financial debt
1,135Net working capital
Comments
Financial debt as of Sept. 30, 2007:
• Syndicated loan: €175 million
• ABS: €372 million
• Bank borrowings: €187 million
• Convertible: €262 million
• Increased net financial debt due to
acquisitions and higher NWC
Equity:
• Convertible equity share: capital
increase of €62 million booked
• Decreased equity ratio from 31%
to 26% due to increased total
assets
Net Working Capital:
• Increase driven by sales, higher
price levels and acquisitions

21. 21
Statement of cash flow
Comments
9862Proceeds from capital increase
-7-63Others
12-51Cash flow from operating activities
10120Inflow from disposals of fixed assets/others
-41-386Outflow from investments in fixed assets
60-366Cash flow from investing activities
-268-241Changes in net working capital
-73463Changes in financial liabilities
287253Operating CF
650Total cash flow
-7419Cash flow from financing activities
-6-45Dividends
-26-61Net interest payments
9M
2006
9M
2007
(€m)
 CF from operating activities
impacted by high net working
capital requirements
 Investing cash flow in Q3 2007
mainly impacted by cash outflow
for the various acquisitions and
increased stake in Swiss
Holding
 Equity component of the
convertible bond: 62€ million
(2006: capital increase for IPO)
 Net interest payments including
one-off pre-redemption fees for
high yield bond

22. 22
General financial targets/limits and guidance
108%< 150%Gearing (Net financial debt/Equity)
2.5x< 3.0xLeverage (Net financial debt/EBITDA LTM)
6.1%> 6%Underlying EBITDA margin*
15.7%> 10% p.aUnderlying sales growth
Actual
9M 2007
General
target/limit



Challenging financial targets throughout the cycle

* According to new definition
 EBITDA approximately 10% below reported 2006 level
Outlook / guidance


23. 23
Q3 Interim ReportNovember 14:
Q2 Interim ReportAugust 14:
Annual General MeetingJune 20:
Q1 Interim ReportMay 15:
Full Year Results 2007April 1:
Financial calendar 2008 and contact details
Financial calendar 2008
www.kloeckner.deInternet:
claudia.nickolaus@kloeckner.deE-mail:
+49 203 307 5025Fax:
+49 203 307 2050Phone:
Claudia Nickolaus, Head of IR
Contact details Investor Relations

24. 24
Agenda
1. Highlights Q3/9M 2007, market and strategy
Dr. Thomas Ludwig, CEO
2. Financials Q3/9M 2007 and outlook
Gisbert Rühl, CFO
Appendix

25. 25
Appendix
Table of contents
Quarterly results 2007/2006 and FY results 2006/2005
Debt facilities
Convertible bonds – terms and conditions
Acquisition criteria and process

26. 26
-4.44-0.971.641.160.860.410.79EPS (in €)
-
40
6
-22
68
-10
78
5.9
92
19.8
307
1,550
1,629
Q1
2007
5,8686,1271,6011,6051,4671,4531,6631,601Volume (Ttons)
812735075105433559Income before taxes
-29-39-13-22-2016-12-14Income taxes
1628698548Minority interests
0.78
37
-17
76
5.9
93
18.0
286
1,583
Q3
2007
-------Diluted EPS (in €)
362063145765419Net income
-54-64-14-14-24-12-52Financial result
13533764891285587EBIT
4.07.16.07.310.34.96.2% margin
1973957910414370103EBITDA
19.921.821.522.322.521.019.8% margin
9871,208285316313294328Gross profit
4,9645,5321,3231,4181,3941,3981,650Sales
FY
2005*
FY
2006
Q1
2006
Q2
2006
Q3
2006
Q4
2006
Q2
2007
(€m)
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).

27. 27
Debt facilities
325+325-Convertible bond
1,815+7251,090Total facilities
--170170High yield bond
980+500480Total senior bank facilities
380-100480Bilateral credit agreements
600+600-Syndicated loan
510+70440Total
90+3060ABS USA
420+40380ABS Europe
New debt
structure
Change in
debt structure
Old debt
structure
(€m)

28. 28
Convertible bonds – terms and conditions
 Size: €325 million
 Shares underlying: approx. 4 million
 Denomination: €50,000
 Maturity date: July 27, 2012 (5 years)
 Coupon: 1.50% p.a.
 Reference price: €59.81
 Conversion price: €80.75 (35% above reference price)
 Conversion ratio: 619.1950 shares per bond
 Conversion right: September 6, 2007 until July 18, 2012
 Early redemption at the option of the issuer: from August 15, 2010 onwards only
possible if share price exceeds approx. €105 (= 130% of the conversion price)
 Listed on the “Freiverkehr” segment of the Frankfurt Stock Exchange (Open Market)

29. 29
Strong acquisition criteria
Further 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

30. 30
Efficient acquisition process
Approach
● 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 led 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/tax/environmental
Country
Organization
Group
Joint effort
Size of the project
Complexityoftheproject
Process run by…

31. 31
Our symbol
the ears
attentive to customer needs
the eyes
looking forward to new developments
the nose
sniffing out opportunities
to improve performance
the ball
symbolic of our role to fetch
and carry for our customers
the legs
always moving fast to keep up with
the demands of the customers

32. 32
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.