borusan mannesmann boru (bmb)

-1-To be globally recognized leading steel pipe company

BORUSAN MANNESMANN BORU (BMB)BORUSAN MANNESMANN BORU (BMB)Investor Conference / June 28Investor Conference / June 28--29, 2007 / Paris29, 2007 / Paris


BMB at a GlanceBMB at a Glance


BorusanBorusan is a highly reputable conglomerate focused in six strategic business units

Steel Distributorship New Businesses

BMW / MINI / Land Rover$ 394 m

Caterpillar$ 502 m

Logistics$ 73 m

Flat Steel$ 740 m

Telekom$ 61 m

Borusan Mannesmann BoruBM Vobarno Tubi, ItalyaBM Espana, Spain

Borusan OtomotivBorusan Oto

Borusan MakinaBorusan Güç Sistemleri

Borusan Lojistik*

BorçelikKerim Çelik

Borusan Telekom

2000 2001 2002 2003 2004 2005 2006Net Sales 875 540 691 1.019 1.589 1.952 2.350Exports 96 51 77 105 186 143 225PPE,net 423 420 464 552 577 558 607Total Assets 750 660 801 1.020 1.306 1.343 1.618

WeldedSteel Pipes

*Non-Group Company Sales


ShareholdersTurkey’s leading industrial group Borusan and Europe’s pioneer in pipe sector Salzgitter have joined forces in steel pipe production.

77%

23%

Free Float16%

Others11%

100%

100%

73%BM Pipe Investment

Company

Borusan Group

–one of Turkey’s major industry and service groups, founded in 1958

–active in four primary business areas of steel, distributorship, logistics and telecommunications.

–2006 consolidated turnover is 2,4bn$, targeting 5bn$by 2010.

Salzgitter Group

–one of Europe's leading steel and technology companies, founded in 1858

– the Group is structured in four divisions -Steel, Tubes, Trading and Services .

–2006 consolidated turnover is 8,4bn€ of which 1,5bn€ from tube division.

• BMB quoted on Istanbul Stock Exchange in 1994, ticker: BRSANBRSAN

• Current free float rate is 16% with an average daily trading volume of 0,2mn$ in last six months.

• MCap is 225mn$ by June,22 2007

• Targeting fast growing linepipe demand in Iberian peninsula. (investment phase)

• Acquired in 2001 to target European automotive industry with high value added special pipes.

• Achieved 525mn$ turnover and ~700k tons of sales volume in 2006.

• Leader with %33 market share in Turkish steel pipe industry.LISTED COMPANY

Simplified shareholding structure


Management ToolsBMB’s management model is an integral part of its competitive edge.

Drive to succeed Personal initiative and responsibilityCustomer Orientation Integrity Contribution to community

Our Values

Kocabıyık Family

Shareholders & Strategic Business Partners

Focus on voice of customer+

Modern HR Management

360° performance evaluation / competency management

Career Planning

Leader Development Program

High Level of Compliance with Corporate Governance Principles

Independent Board Members

IFRS accounts audited since 1984

Dividend distribution policy

Success-Driven Management

Dynamic management with focus on KPI’s.

Average age for top management is 39.


Steel Pipe Business

PROCUREPROCURE PRODUCEPRODUCE SELL/DISTRIBUTESELL/DISTRIBUTE CUSTOMERSCUSTOMERS

• Hot Rolled Coil (HRC)

• Import ~80%

• Turkey ~20%

=800k tons in 2006

• Electric Resistance Welded (ERW)

• Spirally Sub-Merged Arc Welded (SSAW)

Sales Breakdown

• Water & Gas Pipes 30%

• Pressure Pipes 14%

• Construction Pipes 12%

• Special Pipes 10%

• Industrial Pipes 5%

• Linepipes-spiral 18%

• Other 11%

• 3 plants in Turkey

• 1 in Italy (Vobarno)

• 1 in Spain (under constr.)

Capacity

• 625k tons in ERW

• 200k tons in SSAW

• +50k tons in ERW by ‘07Q3

• +50k tons in SSAW by ‘08Q3

= 925k tons

• 460k tons domestic (leader with 30% market share)

• 240k tons export (1/3 of total volume)

=700k tons sales in 2006

• ~150 exclusive/non-exclusive dealers in domestic market.

• Widespread along the country

• Non-exclusive dealers in export markets

• Projects Segment;Government Institutions, pipeline contractors

• Construction Segment;Residential & superstructure (hotel, shopping mall, airport) construction companies, water, heating, firefighting system installation companies

• Specialized Manufacturers;Bicycle, furniture, green house, towel warmer, shelf manufacturers

• Automotive Segment;OEMs, component manufacturers in European and Turkish automotive industry

~23

Specialized in welded steel pipe business while serving different customer segments with a wide range of product portfolio.

%

~62%

~6%

~9%


Historical BackgroundBacked by almost 50-years of experience in pipe sector, BMB is to offer future growth stories, as it was the case in the past.

Borusan Boru (BBF) founded in Halkalı, Istanbul‘58

Halkalı plant started operations‘68

Gemlik, plant started operations‘74

BBF Quoted on Istanbul Stock Exchange ‘94

Acquisition of Mannesmann Boru (MB) shares from Privatization Administration.

‘98

Acquisition of Vobarno (Italy) ‘01

‘04

‘06

Merger of BBF and MB, company name is amended as Borusan Mannesmann Boru (BMB)

BMB set up its 2010 strategy; started investments to increase capacity

115219 264 273 327

39875

75106 151

193

243

2002 2003 2004 2005 2006 2007B

Domestic Exports

190294

370424

520641 >> 28% CAGR>> 28% CAGR

304 391 390 432 458 534

184169 152

187241

272

2002 2003 2004 2005 2006 2007B

Domestic Export

488560 542

619700

806 >> 11% CAGR>> 11% CAGR

Turnover (mn$)*Turnover (mn$)*Turnover (mn$)*

Volume (ktons)*Volume (ktons)*Volume (ktons)*

*BMB only


Production PlantsProduction plants are highly specialized in serving customer requirements in terms of product development, production quality and delivery time.

Halkalı Vobarno, Italy• 100k tons p.a. ERW capacity• Serves Turkish and European

automotive market.

• 200k tons p.a. SSAW capacity• 100k tons p.a. ERW capacity• Serves oil & gas market for

linepipe projects

TURKEYTURKEY EUROPEEUROPE

• 400k tons p.a. ERW capacity• +50k tons p.a. ERW by

2007Q3• Serves mainly to construction

industry• Port facility provide easy

access to supply sources and export destinations

• 25k tons p.a. ERW capacity• Specialized in serving

European automotive market.

BM Espana,Spain• 50k tons p.a. ERW

capacity• Specialized in serving

linepipe market in iberian peninsula.

• Planned to the commissioned by 2008Q3.UNDER

CONSTRUCTI

ON

• Special Pipes• Industrial Pipes

• Special Pipes

• Spiral Pipes

İzmit

Gemlik

BMB pursuits investment BMB pursuits investment opportunities for being a local opportunities for being a local producer in target markets (Europe, producer in target markets (Europe, N.Africa, M.East are in scope)N.Africa, M.East are in scope)

• Spiral Pipes• Construction

Pipes

• Water & Gas pipes

• Pressure Pipes• OCTG


Financial Figures

Key Financial Figures* 2004 2005

542390152

619432187

431280151

256%

41$/t

Net Debt (mn$) 38,7 (2,6) 33,3

12

251

8%

370264106

4412%81$/t

11

250

14%

2006

Sales Volume (k tons)–Domestic–Export

700458241

Turnover (mn$)–Domestic–Export

525332193

EBITDA (mn$)–Margin–Per ton

489%

69$/t

Capex (mn$) 28

Capital Employed (mn$) 329

ROIC % 9%

EBITDA(mn$) & EBITDA ($/ton)

25

4430

2318

2348

524938

48 54

81

41

6965

0

10

20

30

40

50

60

2000 2001 2002 2003 2004 2005 2006 2007B

EBITDA EBITDA/ton

Margins

10% 11% 12%10%

12%

6%

9% 8%

12%

9%

14% 13%

17%

11%

15%

12%

0%

5%

10%

15%

20%

2000 2001 2002 2003 2004 2005 2006 2007B

EBITDA GP

Back to upward trend in profit margins after a sluggish performance caused by unexpectedly sharp price declines in 2005.

• Raw material (HRC) cost constitutes almost 80% of total production costs in pipe business.

• Sales prices are immediately affected by HRC price trend however cost base adjusts with a time lag of ~3 months due to order-to-delivery period of imported HRC.

• Since 2005, HRC steel prices followed a very different price pattern with short cycles, high price volatility and upward trend.

*Consolidated IAS financials


HRC Price TrendA new HRC price pattern evolved; short cycle period, high volatility and upward trend.

HRC Prices Russian Export FOB Prices Black Sea USD/ton

480

340

225

165150

0

100

200

300

400

500

600

700

Aug-96

Dec-96

Apr-97

Aug-97

Dec-97

Apr-98

Aug-98

Dec-98

Apr-99

Aug-99

Dec-99

Apr-00

Aug-00

Dec-00

Apr-01

Aug-01

Dec-01

Apr-02

Aug-02

Dec-02

Apr-03

Aug-03

Dec-03

Apr-04

Aug-04

Dec-04

Apr-05

Aug-05

Dec-05

Apr-06

Aug-06

Dec-06

Apr-07

Source: CRUMonitor

35 MonthsStdev: 40$/ton




Rockbottoms level up after each cycle

• Sharp variations in HRC affect profit margins in pipe business.

• In near future, HRC prices are expected to stay strong but be more stable– as the control on supply side is increasing through consolidations– production oriented approach in mills turns into customer orientation– share of long term contracts in product portfolio is increasing


Turkish Steel Pipe MarketTurkish Steel Pipe Market


Turkish Steel Pipe MarketConsistently growing welded steel pipe demand while export is a tool to optimize capacity utilization

0

200

400

600

800

1.000

1.200

2001 2002 2003 2004 2005 2006

ERW SSAW

Market Evaluation (kton)Market Evaluation (kton)

700

1800

458

240

942

960

Produ

ction

Impor

ts

Exports

Consu

mp.

BMB Rest

2.500 100 1.200

1.400

Market Balance (kton) - 2006Market Balance (kton) - 2006

CAGR: 12%

Constant demand for linepipes

Baku-Tiflisi-Ceyhan (BTC) project : ~270k tons

• Local market demand is well below installed capacities.

• Industry’s average capacity utilization ratio (CUR) is ~70%.

• Exports are critical for capacity optimization.

• BMB represents

–~28% of production

–~20% of export

–~30% of local market demand

–while CUR is well above industry average at ~80%.

• ERW market consistently grow by 12% p.a. as the macroeconomic stability achieved after 2001 crisis.

• SSAW market demand provides a reliable groundbase at ~0,3mn tons p.a. but outperforms as international oil&gas projects, like BTC, are realized.


Product PositioningNiche product segments outperform volume driven segments in term of profitability.

• Fragmentation: Few competitors even though profit margins are high.

• Barriers to entry: Production quality, customer orientation, project management know-how, corporate identity is a must for customers.

• Competition on “Best Solution Provider”

• BMB’s Strategy: To increase its share in high value added product segments

• Fragmentation: highly fragmented. Competition is based on price and availability which results low profit margins.

• Barriers to Entry: easy entry, economies of scale is important rather than customer orientation and quality

• Competition on “Lowest Price”

• BMB’s Strategy: To achieve economies of scale in high volume product segments

20%

55%

40%15%

20%

68%

Bubble size represents #of competitors.

X% represents BMB’s market share

Product PositioningProduct Positioning

Constr.

Pressure

W&G

Linepipe

Special

Industrial

0%0 100 200 300 400 500

Local Market Volume (ktons)

10%

20%

30%

40%

50%

App

rox.

GP

Leve

ls


Market DriversMarket Drivers


Turkish Steel Pipe Market - PotentialModerate but consistent growth in demand is expected with opportunities in high value add product segments

1.415

300

60

275

370

80

330

0 200 400 600 800 1000 1200 1400 1600

Linepipe

W&G

Pressure

Const.

Industrial

Special

Market

• Pursuing international linepipe projects, as Turkey being a transit country.

• Increasing demand for pressure pipes in Anatolian cities due to growing natural gas usage

• Investments on airports, railways and superstructures (hotels, shopping malls etc.) drivedemand for construction pipes

• Usage of steel pipes in furniture industry and economic growth drives demand for industrial pipes.

• Turkey becomes a production base for automotive industry, positively affects special pipe sales

CAGR

1.860

300

90

400

510

130

430

0 200 400 600 800 1000 1200 1400 1600 1800 2000

Linepipe

W&G

Pressure

Const.

Industrial

Special

Market

k tons

2006 2010 BMB Market Share

~68%

~15%

~20%

~55%

~40%

~20%

~33%

• BMB well positioned to cultivate future growth prospects.

• Upcoming capacity investments target high value added product segments.

High End ProductsLow End Products

11%

10%

8%

13%

7%

-

8%


Oil & Gas Industry (Linepipes)Main pipelines in Turkey have already been completed. However international pipeline projects may create sizable opportunities.

• Main backbone is constructed in Turkey.–Blue Stream Gas Pipeline 2000 64k tons

–Baku-Tiflisi-Ceyhan Oil Pipeline 2003 268k tons

–Turkey Greece Gas Pipeline 2005 50k tons

–Shah Deniz Gas Pipeline 2005 38k tons

–West Anatolia Gas Pipeline 2005 61k tons

• It is expected that the loop lines will continue to provide stable demand of ~300k tons p.a.

• International projects such as Nabucco may gear up the local demand significantly.

Nabucco

– Gas pipeline to connect 5 countries; Turkey, Bulgaria, Romania, Hungary and Austria.

– Total length of pipeline is ~3,3k km of which ~2k km in Turkey.

– 56” diameter pipeline for onshore sections and 36” for offshore section across Marmara sea.

– Total budget of the project is ~5bn€.

– Planned construction of 1st phase starts by 2009


Oil & Gas Industry (Linepipes)Opportunity window is wide open especially in North Africa, Middle East and Europe due to increasing pipeline investments, triggered by high energy prices.

Algeria• Crude oil and natural gas will continue to be the main energy resource of the world.

• In foreseeable future, demand for oil and natural gas will increase especially in emerging economies.

• High oil and gas prices favor pipeline investments since feasibility is a key issue in deciding such infrastructure investments.

– Pipeline projects exist to form an oil and natural gas pipeline network between country’s natural energy resource fields and Mediterranean coast.

– Development plan along the Mediterranean coast, based on the large gasification plan, construction of several desalinization plants, connections with water reservoirs.

Spain

– New pipelines as well as replacement of existing lines especially for oil & gas network.

Iran

– Transition of newly discovered energy resources to international markets, to overcome dependence on Russia, drive international projects, like BTC.

CIS


Natural Gas Industry (Pressure Pipes)Increasing usage of natural gas in Turkey drives infrastructure investments especially in Anatolian cities.

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

2006 2007 2008 2009 2010 2015 2020

Natural Gas Demand & Supply Forecast by BOTAS

Consumption Supply

CAGR 10%

CAGR 4%

• According to current supply and demand forecasts, natural gas demand in Turkey will increase by 10% CAGR till 2010 then expected to slow down to 4%.

• Most of the Anatolian cities will complete their infrastructure investments within the period of 2006-2010.

• According to base case scenario, total of 61 cities will convert their residential heating system via completing infrastructure investments, (33 cities in 2007 and 24 cities in 2009)


Oil & Gas Industry (Pressure Pipes-OCTG)High energy prices also drives the demand for OCTG pipes. North America is the leading market representing ~40% of worldwide demand.

• OCTG pipe demand is highly correlated with the oil / gas extraction activity and the number of active oil and gas production installations, or “rigs”, both offshore and onshore.

• The rig count is historically most closely correlated with the price of oil. High energy prices will stimulate investments in rigs and then demand for OCTG pipes.

• Welded pipes have a disadvantage over seamless since the general perception is “any weld in casing and tubing would increase the risk of pipe failure”.

• On the other hand, share of welded pipes in total consumption slightly increased over the last decade with the advantage of lower manufacturing costs.

• Historical data indicate that welded pipes will constitute approx. 1/3 of total OCTG market.

OCTG = Oil Country Tubular Goods


Construction Industry (Const. Pipes & Profiles)Forthcoming projects in housing, building, superstructures will continue to create demand in Turkey.

% Change on yoy basis

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Const.GNP

• Assuming that the macroeconomic stability will persist, growth in construction sector will continue but probably with a diminishing marginal growth rate.

Macroeconomic crisis in 2001 severely affected the construction industry and recovery took place with a time lag of 2 years.

• In scope of the IX. State Development Programme, expected growth rate for construction industry is set under 3 scenario for next decade.

– Optimistic (EU Membership) 10,7% CAGR

– Base Case 7,8%

– Worst Case 5,4%

• Apart from the increasing business activity in Turkey, considerable amount of projects run by Turkish constructors in abroad.

• Total project size undertaken by Turkish constructors has increased 65% CAGR between 2003 to 2005.


Automotive Industry (Special Pipes)Turkey becomes a production base for automotive industry, positively affects special pipe sales

• According to OICA, total of 20,8mn units of motor vehicles was produced in Europe, representing 4% increase over previous year.

• Germany represents 27% of total production, followed by France 17% and Spain 14%.

• According to TUIK data, vehicle production is listed as one of the fastest growing industry in Turkey with 33% CAGR since 2001.

• Automotive main industry

• Shock absorber manufacturers

• Drive shaft manufacturers

• Car seat manufacturers

• Axle manufacturers

• Air cylinder manufacturers

• Rubber – metal parts manufacturers

• Hydraulic equipment manufacturers

Vehicle Production in Turkey

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

2001 2002 2003 2004 2005

Other Vehicles

0

100000

200000

300000

400000

500000

600000

700000

Automobile

TruckPickupBusMinibüsTractorAutomobile

Application AreasApplication Areas

OICA = Organisation Internationale des Constructeurs D’Automobiles TUIK = Turkish Statistical Institute


BMBBMB’’s Response to Market Driverss Response to Market Drivers


Strategic TargetsConsidering market drivers, BMB identified its 2010 strategic targets

Be a 1bn $ company

Be 1 mn ton company

2006 : ~525 mn $ company

2006 : ~700k ton company

EBITDA > 11% 2006 : ~9%

PBT > 7% 2006 : ~7%

ROIC > 14% 2006 : ~9%

50% of sales outside Turkey 2006 : ~34% (volume based)

20% of production outside Turkey 2006 : only 20k ton in Vobarno

Market Share: 1/3 of each market segment in Turkey 2006 : ~33% (overall)

Achieve >4 Sigma levels on all key customer processes

Achieve corporate culture enhancement targets


Growth PathBMB’s investment plan is the integral part of its 2010 strategic plan

VisionVisionTo be a globally recognized, leading steel pipe company

MissionMissionBe a preferred supplier while growing in each segment and provide sustainable profit to

stakeholders

Be A Preferred SupplierBe A Preferred Supplier Grow in Each SegmentGrow in Each Segment Provide Sustainable ProfitProvide Sustainable Profit

• Improve customer focus and regional business intelligence in

Turkish steel pipe market

• New investments in high value add product lines

• Diversify and strengthen Oil & Gas market penetration

• Keep market shares at target level

• Attract, retain and develop key and high potential employees

• Optimize use of assets and processes for operational efficiencies

• Secure consistent flow of best buy raw material with minimum cost

• Spiral Pipes • Turkey, North Africa, Middle East, CIS, Europe

• Be a major player in Oil & Gas market

• Oil & Gas Industry

• Special Pipes

• Pressure Pipes

• Turkey, Europe • Secure mother pipe supply

• Increase market share

• Automotive Industry


Investment StepsBMB has already initiated capacity investment plans to cultivate market opportunities

STEP-by-STEP GROWTH PLAN1.000

750505050

0

150

300

450

600

750

900

1. 050

1. 200

CurrentCapacity

Step1 Step2 Step3 2010 Target

K Tons

Location

Welding

ProductCoverage

Turkey

Spiral 150k tonERW 600k ton

Line pipeWater PipesPressure PipesPrecision pipesSpecial PipesConstruction Pipes

Turkey

Spiral

Line pipe

Spain

Spiral

Line pipe

Turkey

ERW

Mother pipeproduction forspecial pipes

ForthcomingInvestment Plans

Achieve over1mn tons of sales volumeStart up date 2007Q1 2008Q32007Q3

HIGH VALUE ADD PRODUCT LINES AND MARKET SEGMENTS WILL BE IN-SCOPE FOR FORTHCOMING INVESTMENT PLANS

• INVESTMENT COST IS ~40MN$

• EXPECTED TURNOVER AT FULL CAPACITY IS ~140MN$

• EXPECTED EBITDA CONTRIBUTION IS ~25MN$


1) Spiral Pipe Investment - Izmit PlantCapacity restriction in Izmit plant eased; more flexibility in tendering linepipe projects in target markets.

New capacity commissioned by 2007Q1.

Potential demand for spiral pipes in target markets.

• Major natural gas and oil pipelines in Turkey have been completed or tendered so far. However,

–A stable demand at ~300k tons/year exists for the construction of loop lines between cities and ERW linepipes within the city border limits.

–Sizable demand is located in developing regions such as North Africa and Middle-East.

Breakdown of Spiral Pipe Sales (k tons)

57 6138 39

21 33 85106

020406080

100120140160

2004 2005 2006 2007B

ExportDomestic

• In line with the business strategy, BMB increased its penetration into export markets but with a limited spiral pipe production capacity of 100k tons in Izmit plant.

• Considering the high demand and brand recognition in international markets, BMB comissioned a spiral pipe production line with a capacity of 50k tons by 2007Q1.

• Sales profile of the additional capacity will be approx. 80% water and gas linepipes and 20% piling pipes, serving mostly for the potential projects in North Africa, Middle East and Turkey.

• Total investment cost is ~7mn$ against total contribution to turnover by ~43mn$ and EBITDA contribution by ~9mn$ at full capacity utilization in 2008.

PROJECT POOL Project size (mn tons)Hot Projects

Algeria 1.7Iran 0.4

2.1Follow Up Projects

North Africa 2.9Turkey 0.4Iran 0.3Lybia-Egypt 0.3Jordan 0.3Algeria 0.1Syria 0.1

4.4

Grand Total 6.5


2) Special Pipe Upstream Integration - Gemlik PlantBMB will become one of the top notch mother tube producer in Europe while increasing pressure pipe sales at the same time.

• The investment is classified as an upstream investment and brings a competitive advantage to BMB in mother tube production, which is required to produce drawn tubes.

• Drawn tubes are high value add “special pipes” with strict dimension tolerances, high surface quality and special mechanical property requirements.

• Apart from having flexibility and efficiency in mother tube production, new investment will ease capacity bottleneck in existing lines.

• As the demand in natural gas market is increasing in Turkey, current SRM* capacity is overbooked in producing natural gas pipes, mother pipes and OCTG pipes. Therefore, the investment will create more room to grow in high value add natural gas market where the demand is consistently growing.

Mother Tube

Drawn Tube

HRC

Industry

Automotive (Turkey, Europe)

+50k tons new capacity

Customers

OEMs, Component Manufacturers, Service Centers

Application AreasShock absorbers, Drive shafts, Axle components, Camshafts, Anti-vibration parts, Steering systems, Hydraulic cylinders, (pneumatic/telescopic), Airbag components, Stabilizers, Gas springs

• Production line is expected to be commissioned by 2007Q3in Gemlik plant and will bring an additional 50k tons p.a. at full capacity.

• Total investment cost is forecasted as ~15 mn$, including machinery/equipment, building and commissioning costs, against total contribution to turnover by ~40 mn$ and to EBITDA by ~6 mn$ as of 2008.

A new production hall is constructed in Gemlik plant

*SRM = Stretch Reduced Mill


3) Spiral Pipe Investment - Espana PlantBMB positioned Iberian peninsula as one of the target markets.

• Large gasification plan being rolled out by Enagas will drive potential demand in gas line pipes. On the other hand, development plan along the Mediterranean coast in the next 3-5 years, based on the construction of several desalinization plants and connections with water reservoirs will create further demand.

• Considering the positive demand outlook in Iberian peninsula, BMB has decided to be a local producer in Spain to gain competitive advantage.

• A spirally welded pipe mill, having 50k tons of capacity, will be commissioned by 2008Q3 in Hellin, South East of Spain.

• BMB and Socotherm created a strategic alliance where BMB will own a spiral pipe manufacturing plant next to Socotherm Coating Mill in Hellin which will provide exclusive coating service to BM Espana SA, newly incorporated subsidiary of BMB.

• Investment is expected to deliver ~60mn$ turnover at maximum capacity of 50k tons and 15% EBITDA margin against ~16mn$ of total investment cost.

• The capacity of the greenfield investment in Spain shall be increased to 100k tons considering the growth potential of line pipe market.

Land improvement activity in Hellin, Spain


Share PerformanceShare Performance


Market Performance BRSAN is highly correlated with ISE 100 with average Mcap of 220mn$ in last six months.

BRSAN MCap vs ISE 100

0

50

100

150

200

250

300

Jun-06

Jun-06

Jul-0

6Aug-06Sep

-06Oct-

06Nov-0

6Dec

-06Ja

n-07Feb

-07Mar-

07Apr-0

7May

-07Ju

n-07

mn$

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

40,00Index

BRSAN Mcap mn$ISE 100 $

Correlation between BRSAN and ISE 100 = 0,85

~25% increase in ISE-100

~11% increase in BRSAN

March-to-June 2007

Min. ~197mn$

Max. ~240mn$

Average ~220mn$

Mcap in 2007


http://www.borusan.com

http://www.borusanmannesmann.com

[email protected]

Investor Relations

• Mr. Kagan ARI [email protected] BMB IR Contact

mailto:[email protected]


DisclaimerForward-Looking StatementsStatements in this presentation describing the Company’s objectives, projections, estimates, expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Forward-looking statements might be identified by the words “believe”, “expect”, “anticipate”, “target” or similar expressions. Although Company’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include, among others, economic conditions affecting demand, supply and price conditions in the domestic and overseas markets in which Company conducts business transactions, changes in Government regulations, tax laws and other incidental factors.

borusan mannesmann boru (bmb)

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