2011 Business and Financial Performance

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1 211 Business and Financial Performance March 27, 212 1

2 Content 1. Introduction 2. Business overview 3. Financials 4. Divestitures and Internal Reorganization outlook 6. Q&A 2

3 Section 1 Introduction 3

4 Introduction Speaker Krzysztof Zoła CFO Age 4 1 years with the Company 4

5 Introduction 211 Highlights Improved demand, prices and margins for all products particularly in H1. H2 weaker in terms of automotive sectors (HSJ). Q4 zloty weakening made a positive contribution to sales of semi-products (Ferrostal) 59% yoy revenues increase; sharp increase of profitability; EBITDA at PLN 144,7m from PLN 1,4 million in 21 Better market conditions reflected in growth in capacities utilization: ANNUAL CAPACITY Tonnes Y 211 Q4 211 UTYLIZATION RATE Q3 211 Q2 211 Q1 211 Y 21 Y 29 FERR % 15% 96% 86% 85% 64% 66% HSJ % 58% 72% 86% 7% 52% 37% COMBINED % 86% 86% 86% 79% 59% 54% GDP growth over 4% in Poland Polish steel production up by 1% yoy Closing of two major divestment transactions regarding distribution business and finalization of internal reorganization 5

Better market conditions reflected in growth in capacities utilization: ANNUAL CAPACITY Tonnes Y 211 Q4 211 UTYLIZATION RATE Q3 211 Q2 211 Q1 211 Y 21 Y 29 FERR 375 93% 15% 96% 86% 85% 64% 66% HSJ

6 Section 2 Business Overview 6

7 Business Overview Environment CRUDE STEEL PRODUCTION (1) Y 211 % YoY Y 21 Y 29 mln tonnes Poland 8,8 1% 8, 7,2 EU (27) 177,4 3% 172,9 139, China 683,3 9% 626,7 567,8 Global 1 49,1 7% 1 395,5 1 22, UNIT PRICES (2) 211 % YoY PLN / Ton Scrap metal % Billets (FERR) % billet / scrap diff Bars (flat, plain, squares) % bars / scrap diff Rebars (Fi18) rebars / scrap diff % (1) Source: World Steel Association (2) Source: COGNOR SA 7

Billets (FERR) 2 38 25% 1629 1 312 billet / scrap diff. 1 21 759 666 Bars (flat, plain, squares) 2 285 31% 175 1 423 bars / scrap diff.

8 Business Overview Segments SCRAP METAL Y 211 Y 21 Y 29 PURCHASES FROM EXTERNAL SUPPLIERS Tonnes FERR ZLMET HSJ OTHER INTERNAL USE Tonnes FERR HSJ SALES TO EXTERNAL CUSTOMERS Tonnes ZLMET OTHER SALES PLN CONSOLIDATED TOTAL PURCHASES in TONNES TOTAL INTERNAL USE in TONNES TOTAL SALES in TONNES TOTAL SALES in ' PLN

CUSTOMERS Tonnes ZLMET 118 98 12 16 92 516 OTHER 975 1 841 SALES PLN CONSOLIDATED 12 64 88 355 56 39 TOTAL PURCHASES in TONNES 711 743 529

9 Business Overview Segments BILLETS Y 211 Y 21 Y 29 PURCHASES Tonnes EXTERNAL SOURCES PRODUCTION Tonnes FERR HSJ INTERNAL USE Tonnes FERR HSJ SALES TO EXTERNAL CUSTOMERS Tonnes ZLOM 129 FERR HSJ COG SALES PLN CONSOLIDATED TOTAL PURCHASES in TONNES TOTAL PRODUCTION in TONNES TOTAL INTERNAL USE in TONNES TOTAL SALES in TONNES

FERR 252 239 178 857 133 657 HSJ 16 99 2 49 2 39 COG 24 15 SALES PLN CONSOLIDATED 551 525 295 338 178 52 TOTAL PURCHASES in TONNES 1 922

10 Business Overview Segments FINISHED PRODUCTS Y 211 Y 21 Y 29 PRODUCTION Tonnes ZWWB FERR HSJ SALES TO EXTERNAL CUSTOMERS Tonnes ZLOM 86 FERR HSJ SALES PLN CONSOLIDATED TOTAL PRODUCTION in TONNES TOTAL SALES TO EXTERNAL CUSTOMERS in TONNES TOTAL SALES in ' PLN

282 122 337 92 954 SALES PLN CONSOLIDATED 718 7 478 12 47 763 TOTAL PRODUCTION in TONNES 24 657 17 146 197 567

11 Section 3 Financials 11

12 Financials INCOME STATEMENT Y 211 Y 21 Y 29 ' PLN Revenue Cost of sales Gross profit Other income Distribution expenses Administrative expenses EBITDA adjusted for non-recurring items: PLN 131,2 m Other gains/(losses) net Other expenses EBIT Financial income Net profit adjusted for non-recurring items: PLN 35,7 m Financial expenses Net financing costs Profit before tax Income tax expense Profit/loss for the period from discontinued operations Profit for the period Depreciation and amortization EBITDA

39-14 546 1 482 6 562-1 118-18 8-35 423 14 442 1 126-28 51-117 77 59 767 Net profit adjusted for non-recurring items: PLN 35,7 m Financial expenses -15 41-66 167-77 24 Net financing costs -98 479-51

13 Financials ASSETS Y 211 Y 21 Y 29 ' PLN A. TOTAL NON-CURRENT ASSETS I. Intangible assets II. Property, plant and equipment III. Other receivables IV. Investment property and other investments V. Prepaid perpetual usufruct of land A.III. includes PLN 44.3 m in Croatian Claim VI. Deferred tax assets B. TOTAL CURRENT ASSETS I. Inventories II. Receivables A.VI. Increased due to additional tax asset creation due to internal reorganization 1. Trade receivables Current income tax receivable Other investments III. Cash and cash equivalents IV. Assets classified as held for sale V. Assets of disposal groups and disc. oper TOTAL ASSETS

3 m in Croatian Claim VI. Deferred tax assets B. TOTAL CURRENT ASSETS I. Inventories II. Receivables 7 826 48 18 178 472 237 834 4 784 976 983 176 216 143 22 57 82 732 32 249 52 211 775 A.VI. Increased due to additional tax asset creation due to internal reorganization 1.

14 Financials EQUITY AND LIABILITIES Y 211 Y 21 Y 29 ' PLN A. EQUITY I. Issued share capital II. Reserves and retained earnings III. Minority interest B. LIABILITIES I. Non-current liabilities Debt reduced by PLN m 1. Employee benefits obligation 2. Interest-bearing loans and borrowings 3. Other II. Current liabilities Debt reduction offset by PLN 55.8m of net FX losses regarding indebtedness 1. Interest-bearing loans and borrowings Bank overdraft Trade payables Deferred government grants Employee benefits obligation Current income tax payable Provisions for payables III. Liabilities of disposal group classified as held for sale TOTAL EQUITY AND LIABILITIES

Interest-bearing loans and borrowings 3. Other II. Current liabilities 7 97 532 138 8 621 254 447 11 862 53 162 1 369 447 826 38 819 534 11 19 31 57 254 Debt reduction offset by PLN 55.

15 Financials CASH FLOW Y 211 Y 21 Y 29 A. FROM OPERATING ACTIVITIES B. FROM INVESTING ACTIVITIES C. FROM FINANCING ACTIVITIES NET INCREASE IN CASH PLN 13,2 negative cash flow from working capital MAIN METRICS Liquidity ratio Y 211 1,89 Y 21 1,19 Y 29 1,1 Metrics at optimal levels Quick ratio 1,19,98,67 Inventories turnover (days) Trade receivables turnover (days) EBITDA margin 9,3% 1,1% -8,5% Net profit margin 7,5% -18,9% -37,% Equity Net debt Net debt / EBITDA 3,8 66,1-12, 15

Liquidity ratio Y 211 1,89 Y 21 1,19 Y 29 1,1 Metrics at optimal levels Quick ratio 1,19,98,67 Inventories turnover (days) 47 71 112 Trade receivables

16 Section 4 Internal Reorganization 16

17 Divestiture of Distribution Division and Considerations Behind Internal Reorganization Sale of 1% of shares in Cognor Stahlhandel GmbH to Mechel Conditional SPA , closing r. Price for 1% of shares was set at EUR 32.8m and referenced to the company s figures as of r. Final price to be established based on Cognor Stahlhandel GmbH group equity difference between i r. Part of the transaction was a repayment of intercompany loan extended by Złomrex S.A. (currently HSJ S.A.) at the amount of EUR 9.8m Cognor S.A. (Cognor) has received and expects to receive the following proceeds: EUR 24.6m Feb 211 EUR.9m Feb 212 EUR m H1 212, the amount is subject to the dispute between Cognor and the buyer HSJ S.A. has received and expects to receive the following amounts: EUR 5.m Apr / Oct 211 EUR 4.8m Feb 212 Sale of the domestic distribution assets to Arcelor Mittal Distribution Conditional APA , closing r. The transaction comprised of: inventories, real property and other fixed assets. Total sale price accounted for PLN 181.2m net (PLN 197.2m VAT incl.) Cognor has received and expects to receive the following proceeds: PLN 168.8m , PLN 4.1m Jun 211 PLN 2.m Q4 211 PLN 7.4m May 212 PLN 14.9m May 213 Internal reorganization of the Group Acquisition of Złomrex S.A. by Cognor including an indirect acquisition of shares in (i) steel plants - Ferrostal + HSW-HSJ and (ii) scrap collection network - Złomrex Metal Downstream application of proceeds and repayment of bank loans as well as working capital improvement Simplification of the Group s structure by the following subsidiary companies mergers aimed at increasing internal efficiencies and tax benefits The whole of former Złomrex S.A. Group s business became listed on Warsaw Stock Exchange Significant increase of Cognor s potential and profitability 17

12.29 i 31.1.211 r. Part of the transaction was a repayment of intercompany loan extended by Złomrex S.A. (currently HSJ S.A.) at the amount of EUR 9.8m Cognor S.A. (Cognor) has received and expects to receive the following proceeds: EUR 24.

18 Group s Structure Post Internal Reorganization Zlomrex-Finans Zlomrex China 1% Other PS Holdco OMS 1% Production Restricted Group Cognor Group 64,4% COG SERVICES COG FINANSE 1% 1% 1% BSS Other 1% ZLX CENTRUM COGNOR 1% CEN SZCZ Production Scrap 1% 1% 51% KAPITAŁ KAPITAŁ SK ZIF NOTES ISSUER 99,9% HSJ (ZLX + HSW-HSJ) 92.4% FERROSTAL 1% ZLXMETAL SCRAP COLLECTION AND TRADING 75% COG BLD FINANCE SUBSIDIARIES REAL PROPERTIES 1% ROOFING SHEETS ZW-WB STEEL PRODUCTION 18

Production Scrap 1% 1% 51% KAPITAŁ KAPITAŁ SK ZIF NOTES ISSUER 99,9% HSJ (ZLX + HSW-HSJ) 92.

19 Section Outlook 19

20 212 Outlook Main factors Polish GDP around 3% Production expected to slightly fall in Europe with relatively strong Polish market. Demand, prices and margins likely to stabilize on 211 levels with zloty to strengthen further against the EUR and the USD Utilization rates may continue to rise, at HSJ in particular Positive free cash flow, net debt to EBITDA towards 3x multiple by 212 yearend Refinancing of the Notes Organic growth strategy 2

Demand, prices and margins likely to stabilize on 211 levels with zloty to strengthen further against the EUR

21 Section 6 Q & A 21

22 22 COGNOR SA ul. Zielona 26, Poraj tel , fax cognor@cognor.eu,

Business and Finance Mid-tem perspective. Warsaw, February 15-16, 2012

Business and Finance Mid-tem perspective Warsaw, February 15-16, 212 1 Złomrex S.A. Group structure post expansion period between 26-28 PRODUCTION OF STEEL PRODUCTS HSJ - TLENOWNIA HSJ 92,4% FERROSTAL