ZŁOMREX S.A. Q1 2007 Business and Financial Performance 4 June 2007
Content 1. Introduction 2. Business overview 3. Financials 4. Q2 2007 outlook 5. Q&A Appendix 1. March 31, 2007 Indebtedness 2. Q2 2006 2
ZŁOMREX S.A. Introduction Section 1
Introduction Speakers [To come] Krzysztof Krzysztof Dominik Walarowski Zola Barszcz Member of the CFO Chief Board Accountant Age – 51 Age – 35 Age - 31 4 yrs with 6 yrs with 7 yrs with Złomrex Złomrex Złomrex 4
Introduction Q1 2007 Highlights � Closing of EUR 170 million bonds offering: January 26, 2007 � Closing of the acquisition of voestalpine Stahlhandel GmbH: March 28, 2007 � Secondary public offering of Centrostal Gdansk; completed in April 2007 � Exclusivity in the bid for Stalexport Trade: March 02, 2007 and following negotiations (May 31, 2007 signing of the investment agreement) � Bid for ś eljezara Split; exclusivity granted in April 2007; negotiations are being started 5
Introduction Q1 2007 Highlights � Very strong market environment � GDP growth over 7% in Poland and 2-3% in Europe � Steel consumption growth over 30% in Poland � Increase in market prices � Record breaking first quarter Company’ s sales 6
Introduction Q1 2007 Highlights LTM LTM 1Q 2007 1Q 2006 1Q 2007 1Q 2006 Revenues 588 711 356 974 2 174 251 1 123 315 Cost of sales (500 249) (323 864) (1 864 595) (1 007 760) Gross profit 88 462 33 110 309 656 115 555 EBIT 54 850 12 110 180 998 56 979 Depreciation/amortization (10 531) (7 594) (37 559) (24 211) EBITDA 65 381 19 704 218 557 81 190 Net financing costs (20 393) (4 084) (41 352) (16 618) Negative goodwill - - 44 974 - Profit before tax 34 457 8 026 184 620 40 361 Current tax expense (8 069) (3 839) (24 500) (4 988) Deferred tax expense (26) 1 273 (3 038) (3 544) Profit for the period 26 362 5 460 157 082 31 829 7
ZŁOMREX S.A. Business overview Section 2
Business overview Business environment (million tons) Q1 2006 Q1 2007 % YoY Production of Steel Global 288,4 318,9 11% Europe (EU 25) 49,1 53,1 8% Poland 2,3 2,7 17% (million tons) Jan-Feb Jan-Feb % YoY 2006 2007 Consumption of finished steel products Poland 1 449 1 939 34% long products 509 866 70% flat products 789 892 13% Tubes 150 181 20% (million tons) Q1 2006 Q1 2007 % YoY Unit prices Feedstock scrap 694 748 8% Billets 1 372 1 574 15% Rebars 1 497 1 964 31% 9
Business overview Q1 2007 performance drivers Q1 2006 2006 Acquisitions contribution ZLOMREX (‘000 tonnes) CONSOLIDATED HISTORICAL HSW-HSJ Cen Gor Cen Gd Cen Opo Scrap purchases 206 169 37 0 0 0 Billets 36 34 2 0 0 0 Finished products 89 63 26 5 (1) 0 0 Q1 2007 2006 Acquisitions contribution ZLOMREX (‘000 tonnes) CONSOLIDATED HISTORICAL HSW-HSJ Cen Gor Cen Gd Cen Opo Scrap purchases 230 159 71 0 0 0 Billets 52 49 3 0 0 0 Finished products 158 59 48 21 17 12 (2) (1) Business consolidated since March 07, 2006 (2) Includes 6 thousand tonnes of bulk product sales conducted by ZLOMREX S.A. in 1Q 2006 10
Business overview Q1 2007 performance drivers Q1 2006 (‘000 PLN) CONSOLIDATED Sales 356 974 EBITDA 19 704 Net profit 5 460 Q1 2007 2006 Acquisitions contribution ZLOMREX (‘000 PLN) CONSOLIDATED HISTORICAL HSW-HSJ Cen Gor Cen Gd Cen Opo Sales 588 711 323 654 140 305 54 524 42 577 27 651 EBITDA 65 381 33 751 27 950 1 485 1 760 435 Net profit 26 362 3 826 20 439 941 770 386 11
Business overview Production and sales 1 Q 2007 1 Q 2006 % YoY SCRAP sales to external customers volume (‘000 tons) 48 84 -43% value ('000 PLN) 36 024 58 033 -38% Intercompany sales and processing volume (‘000 tons) 230 206 11% TOTAL TURNOVER (‘000 tons) 278 290 -4% 1 Q 2007 1 Q 2006 % YoY SEMI FINISHED PRODUCTS Production (1) volume (‘000 tons) 157 102 49% sales to external customers volume (‘000 tons) 52 36 45% value ('000 PLN) 81 697 49 102 66% (1) excludes 13 793 tonnes of HSW-HSJ January 2006 production - not consolidated 12
Business overview Production and sales 1 Q 2007 1 Q 2006 % YoY FINISHED PRODUCTS production (1) volume (‘000 tons) 96 73 32% bulk product sales volume (‘000 tons) 114 89 28% value ('000 PLN) 274 237 169 204 54% retail volume (‘000 tons) 44 5 value ('000 PLN) 108 886 11 370 TOTAL (‘000 tons) 158 94 68% TOTAL ('000 PLN) 383 123 180 574 112% 1 Q 2007 1 Q 2006 % YoY OTHER sales to external customers value ('000 PLN) 87 867 69 265 27% (1) excludes 12 685 tonnes of HSW-HSJ January 2006 production - not consolidated 13
ZŁOMREX S.A. Financials Section 3
Financials VASTH inclusive figures - Q1 2007 P&L account (pro forma) ‘000 PLN Q1 2007 Q1 2006 External Sales steel scrap 36 024 58 033 billets 81 697 49 102 finished products 758 464 488 519 other 87 867 69 265 Total net sales 964 052 664 919 Gross profit steel scrap 2 480 4 581 billets 13 993 6 576 finished products 109 793 53 805 other 9 185 8 108 Total gross profit 135 451 73 070 Operating profit [EBIT] 65 768 27 109 Net financing costs (30 042) (21 019) Profit before tax 36 632 7 674 Net result 27 985 3 129 Depreciation (13 844) (11 275) 15
Financials VASTH inclusive figures - Q1 2007 balance sheet (actual) ‘000 PLN Q1 2007 Inventories 570 158 Trade and other receivables 595 560 Cash 87 223 Total current assets 1 254 088 Trade and other payables 469 478 Interest bearing debt long term 771 454 short term 185 018 incl. RCF 70 606 Total Interest bearing debt 956 472 Total current liabilities 677 568 Equity 488 011 Total Assets 2 060 988 16
Financials VASTH inclusive figures – LTM Q1 2007 p&l (pro forma) ‘000 PLN Q1 2007 Total net sales 3 576 801 Total gross profit 500 436 Operating profit [EBIT] 239 269 Net financing costs (61 406) Net result 152 579 Depreciation (13 844) EBITDA 277 238 Interest coverage 4,5 Net debt to EBITDA 3,1 Liquidity ratio 1,9 inventories turnover 68 Receivables turnover 61 Payables turnover 56 17
Financials ZŁOMREX historical – balance sheet '000 PLN 2006 Q1 2007 Change Assets VASTH 373 072 Total non-current assets 525 854 900 202 1 287 Inventories 284 519 306 204 21 685 Trade and other receivables 288 684 386 774 98 090 Total current assets 607 008 737 247 Total assets 1 132 862 1 637 449 Equity Total equity 409 078 434 082 Liabilities Interest-bearing loans and borrowings 65 302 724 567 Total non-current liabilities 116 505 777 502 Bank overdraft 55 925 79 906 Interest-bearing loans and borrowings 297 985 66 249 Other financial liabilities 1 063 303 Trade and other payables 249 648 271 832 22 184 Total current liabilities 607 279 425 865 Total liabilities 723 784 1 203 367 Total equity and liabilities 1 132 862 1 637 449 18
Financials VASTH – balance sheet ‘000 EUR 2006 Q1 2007 change Assets Total non-current assets 41 153 43 322 2 169 Inventories 48 848 63 262 14 414 Trade and other receivables 38 062 56 037 17 975 Total current assets 116 091 130 696 Total assets 157 244 174 018 Equity Total equity 40 950 18 389 Liabilities Interest-bearing loans and borrowings 5 829 54 835 Total non-current liabilities 14 968 88 501 Bank overdraft 2 523 Interest-bearing loans and borrowings 61 479 6 681 Other financial payables 761 Trade and other payables 33 311 53 158 19 847 Total current liabilities 101 320 67 128 Total liabilities 116 287 155 629 Total equity and liabilities 157 237 174 018 19
Financials VASTH inclusive figures – Q1 2007 (pro forma) 000 PLN ZLOMREX VASTH TOTAL PROFORMA Working Capital (97 591) (48 533) (146 124) CAPEX 11 818 11 705 23 523 Net interest expense (30 042) 20
ZŁOMREX S.A. Q2 2007 Outlook Section 4
Q2 2007 outlook � Slowdown in Polish GDP dynamics � Decrease in steel consumption � Slightly weaker sales in Poland � Decrease in some finished products prices � Stabilization of pro forma Q2 numbers 22
ZŁOMREX S.A. Q&A Section 4
ZŁOMREX S.A. APPENDIX
Appendix Q 1 Indebtedness Q1 2007 Interest bearing debt long term, incl: 771 454 The notes 641 670 NFOS environmental loans 19 241 leasing 24 191 deferred payment for HSW-HSJ 23 217 VASTH 18 427 Centrostal Gdansk 15 546 VASTH put/call option 22 854 other 6 308 short term, incl: 185 018 FORTIS RCF 56 914 BRE RCF 13 691 NFOS environmental loans 7 048 factoring 47 686 leasing 12 081 VASTH 35 615 Gdansk 1 617 other 10 366 Total Interest bearing debt 956 472 25
Appendix Q 2 2006 1Q 2007 (2) 2Q 2006 (1)(2) ’000 PLN Revenues 588 711 499 187 Cost of sales (500 249) (426 214) Gross profit 88 462 72 973 EBIT 54 850 44 886 Depreciation/amortization (10 531) (9 145) EBITDA 65 381 54 031 Net financing costs (20 393) (6 925) Profit before tax 34 457 37 961 - Profit for the period 26 362 30 002 (1) Centrostal Gdansk and Centrostal Opole not consolidated (2) VASTH not consolidated 26
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