October 6, 2009

Dr. Oliver Falk CFO KSM

Klöckner & Co SECapital Market Days –German operations and new warehouse structure

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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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Agenda

1. German operations

2. New warehouse structure

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Organizational structure

Country organization GermanySales branches managed by a regional sales managerManager processing & services for all branchesProduct management separated from sales organizationCentralized administration

Managing

DirectorsCEO / CFO

Central functions

Kassel

Landsberg

Bremen / Hamburg

Osnabrück

Hagen

Duisburg

Frechen

Personnel

Controlling

Logistics

/ QM

IT coordination

Poland

Rumania

MSC Vienna

Czech

Republic, Prague

Bulgaria

Edelstahlservice

SBZ Mágocs, Ungarn

SBZ Stuttgart

Mannheim

Zweygart Stahlhandel

Würzburg

Nuremburg

Regensburg

Munich

Zwickau

Sales coordination

Taxes

/ Legal Affaires

SBZ Velten

MSC Neumarkt

Accounting

Region North Region South Service & Processing Product

Management

S & P all warehouses

Eastern Europe

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Sales split by industry and product

Klöckner Stahl- und Metallhandel GmbHProducer-independent steel and metal distributor in GermanyDecentralized sales organization with strong connection in local marketsIndustry split KSM with less focus on construction and higher involvement in the machinery industry in comparison to KlöCoLogistic network with 18 warehouses in Germany

Klöckner & Co Group Sales split by product

In 2008

Sales split by industry

In 2008

Construction; 42%

Industrial machinery and equipment;

24%

On-sellers; 10%

Appliances/durable goods manufacturers; 7%

Automotive; 6%

Other; 11%

Tubes; 10%

Quality steel/stainless

steel; 9%

Aluminum; 6%

Other; 12%

Long products/sectional steel;

32%

Flat products; 31%

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Competition in Germany

Competition structureMarket share by competitor1)

(steel distribution industry)

Market in Germany is highly fragmented

63%

15%

Others1

Competitor

4

Competitor

3

Competitor

2

KSM

Competitor

1

6%

6%

5%

5%

●

Two competitors are mainly represented in the „big-volume“

business only●

Products are highly substitutable●

High customer loyalty in case of customized assortment, reliable delivery, good personal relationship and competitive prices

Consolidation of German market expected

1) % of sales

in Germany, source: Company estimates

Sales market shares in %

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Strategic elements

Klöckner Stahl- und Metallhandel GmbH

Suppliers Sourcing Products and services

Logistics/ Distribution Customers

Business process analysis

IT & communication

High priority in 2008/ 2009 besides restructuring acc. to Wave 1

and 2:

Implementation of a new SAP-System

Optimization of warehouse structure

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New SAP standard master template developed

Implementation of completely new developed SAP ERP 6.0 system in a 12-month project

Go Live on July 1, 2009 in Germany and Netherlands

International team of about 50 users (sales, logistics, purchasing, accounting, controlling) of the KlöCo Group designed best in class processes

Customizing and programming done through Group IT with limited support from external consultants

Blueprint CustomizingProgramming

Testing Migration

After Go Live Support

04/200907/2008 10/2008 07/2009

Go Live

SAP template, developed from Germany and Netherlands for KlöCo Group

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Advantage of new SAP – International purchasing

High data quality through centralized maintenance of material and supplier master data

Strengthening of negotiation power through bundling of purchasing volumes

Optimization of stocks

-

Distribution of purchasing volumes to the countries

-

Enforcement of intercompany business

-

Optimal stock level with minimum slow mover and stock-outs

-

Analysis, definition and controlling of quantity targets

Supplier performance measurement

International product catalogue and unified supplier master data

offer significant improvement for the KlöCo International Product Management:

Efficiency improvement for the KlöCo International Product Management

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Advantage of new SAP – International material exchange

The new SAP system uses one article number for one article in all countries - international product catalogueThe description of the articles is done in the respective languages, match codes are defined country specific as well – easy search for sales peopleRegional or national stocks of the countries can be used for countries in the neighbourhoodPotentials

-

Germany and Netherlands-

Germany and France-

Germany and Poland, Czech Republic and Austria

International product catalogue offers international usage of warehouses

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Advantage of new SAP – Customer profitability

Pilot for France and Spain using the “Prodacapo” tool-

Independent from the ERP system in use-

Ex post analysis of customer profitability for single or all ordersSAP ERP 6.0

-

Integrated order calculation with standard cost and PBT information, visible for all sales persons during sales process for each sales position

-

Cost accounting shows identical cost and PBT information –

monthly figures are accumulated figures generated out of previous sales processes

-

PBT information on profit center, product and customer level available-

Analysis of all orders of the customer in SAP Business Intelligence

Customer profitability on basis of standard costing during sales process available

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IT-Projectmanagement – SAP ERP 6.0 roll out map

Germany/ Netherlands

Bulgaria: end of 2009

Romania: end of 2009

Switzerland: first quarter 2011

Spain: end of second quarter 2010

UK: end of third quarter 2010

France: end of 2010

Belgium: first quarter 2010

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Agenda

1. German operations

2. New warehouse structure

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Turnover Germany Remarks

Turnover 2008: the darker the colour, the higher the turnover in the respective region

Highest turnover in the area of Papenburg in north Germany, following the Ruhrgebietarea, then Kassel, Leipzig, Würzburg, Nuremberg until Regensburg

Strongest volumes are achieved in Weser-Ems with shipyard business

The south west and partially the north eastern parts of Germany offer additional market potential

Basically, we need to know, where we sell in order to decide where to set up logistic facilities

Customer concentration

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Year 2000 Summary

Decentralized Setup in 2000

3 sales regions with 36 branches

thereof

-

20 multi metal distributors

-

1 processing center

-

15 specialized distributors

No separation between sales and product management

No material exchange between warehouses of one region

Aggregation of highly independent

profit centers

Decentralized Setup in 2000

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Year 2004 Summary

Regional material exchange 2004

Tightening of the warehouse structure through closure of 12 locations

No. of sales regions reduced to 2 with

-

19 multi metal distributors

-

2 processing centers

-

3 specialized distributors

Introduction of the “star concept” for a daily material exchange between the warehouses of one region

HUBs are in Hanover and Nuremberg

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Example: southern region

Nuremberg

City 2

City 6

City 3

City 5

City 4

City 1daily

daily

daily

4 x week

daily

daily

Star concept

48 hours delivery time to customers

Nuremberg warehouse used as HUB with unloading and loading of trucks during the night

Direct deliveries to customers starting with an order level higher than 10to

Customer related material bundling with complete deliveries to the customer

Cost allocation to the profit center

Principles

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One layer distribution structureuntil 2008

Two layer distribution structure with satellites starting 2009

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

Steel mill

Full assortment

warehouse

Customer

New warehouse structure 2009

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

Cross-Dock

Regional or

central

warehouse with A-

and B-articles

Steel mill

Local warehouse with A-articles

Customer

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Year 2009

Warehouse network 2009

Sales regions unchanged

Further logistical improvements through shutdown of smaller warehouses in Coburg and Bamberg near the bigger plants in Würzburg and Nuremberg

Remaining 18 locations

-

13 multi metal distributors

-

2 processing centers

-

3 specialists

Establishing of regional and central warehouses

Implementation of a central product management organization

Summary

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Assortment and warehouse usage

ABC - classification Summary

A-article, stored locally, e.g. KTR 450

-

More than 40 sales positions per warehouse and year, broader customer structure assumed, limited slow mover risk

-

More than 100 to turnover per profit center and year, one purchase order in each quarter realistic, no risk of stock deprecation due to price declines

B-articles are stored in regional warehouses, if the number of sales positions is higher than 10 in the case of KTR 450

C-articles are not part of the assortment, with exception of products with high gross margins and customer specific material

Overall goal: High inventory turn ratewith minimum one purchase ordereach quarter

B-article C-article

Product group(KTR)

No. of salespositions

per branchand year

Turnoverin to per

branch andyear

No. of salespositionsper regionand year

No. of salespositionsper regionand year

450 ≥ 40 Pos. 100 to > 10 Pos. ≤ 10 Pos.

A-article

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Locations with stainless assortments

High number of warehouses with stainless steel assort-ment in Germany

ABC analysis shows bundling possibilities, one of them is the setup of a regional warehouse in Frechen

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Locations with aluminium assortments

Lower number of warehouses with aluminium assortment in Germany in comparison to stainless steel assortment

Due to similar product related logistical handling procedures, a regional warehouse for aluminium will also be located in Frechen

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Our symbol

the earsattentive to customer needs

the eyeslooking forward to new developments

the nosesniffling 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