Securities Prospectus Klöckner & Co SE Duisburg, Germany Deutsche ...

Securities Prospectus
for the public offering and for the admission to the regulated market segment
(regulierter Markt) of the Frankfurt Stock Exchange with simultaneous admission to the
sub-segment of the regulated market with further post-admission obligations of the
Frankfurt Stock Exchange (Prime Standard)
of 33,250,000 new ordinary registered shares with no par value
from the capital increase against cash contribution from authorized capital resolved by
our management board on May 26, 2011 with the approval of our supervisory
board on May 26, 2011
with subscription rights for the shareholders of Klöckner & Co SE,
each representing a proportionate amount of the issued share capital of EUR 2.50 per share
with full dividend entitlement as of January 1, 2011
of
Klöckner & Co SE
Duisburg, Germany
— International Securities Identification Number (ISIN): DE000KC01000 —
— German Securities Identification Code (WKN): KC0100 —
— Common Code: 025808576 —
May 26, 2011
Joint Global Coordinators and Joint Bookrunners
Deutsche Bank J.P. Morgan
Co-Bookrunners
COMMERZBANK HSBC The Royal Bank of Scotland UniCredit Bank AG

TABLE OF CONTENTS
SUMMARY..................................................................... 1
Overview ..................................................................... 1
Our Strengths .................................................................. 3
Our Strategy ................................................................... 4
Use of Proceeds ................................................................ 5
Selected Consolidated Financial and Other Operating Data ................................. 6
Summary of Risk Factors ......................................................... 9
Summary of the Offering. ......................................................... 10
Summary of General Information on the Company ....................................... 12
Summary of Share Capital and Management of the Company ............................... 12
ZUSAMMENFASSUNG . . .......................................................... 13
Überblick ..................................................................... 13
Wettbewerbsstärken .............................................................. 15
Strategie ...................................................................... 17
Verwendung des Emissionserlöses................................................... 18
Ausgewählte konsolidierte Finanz- und andere Geschäftsdaten .............................. 19
Zusammenfassung der Risikofaktoren ................................................ 22
Zusammenfassung des Angebots .................................................... 23
Zusammenfassung allgemeiner Informationen zur Gesellschaft .............................. 25
Zusammenfassung des Grundkapitals und des Managements der Gesellschaft ................... 25
RISK FACTORS. ................................................................. 26
Risks Related to Our Business ...................................................... 26
Risks Related to the Offering. ...................................................... 36
GENERAL INFORMATION ......................................................... 38
Responsibility for the Contents of this Prospectus. ....................................... 38
Documents Available for Inspection .................................................. 38
Subject Matter of this Prospectus .................................................... 38
Forward-Looking Statements ....................................................... 38
Presentation of Sources of Market Data ............................................... 39
Negative Numbers; Differences in Rounding ........................................... 39
THE OFFERING ................................................................. 40
General ....................................................................... 40
Timetable ..................................................................... 40
Subscription Offer ............................................................... 41
Lock-up ...................................................................... 43
Dilution ...................................................................... 43
Offering Expenses and Net Proceeds of the Offering ..................................... 44
Selling Restriction Notices ........................................................ 44
Underwriters; Underwriting Agreement ............................................... 45
Other Legal Relationships between the Underwriters and the Company ........................ 45
INFORMATION ABOUT THE NEW SHARES. .......................................... 46
Form; Voting Rights . . . .......................................................... 46
Dividend Entitlement; Share of Liquidation Proceeds ..................................... 46
Admission to Stock Exchange Trading; Certification; Delivery .............................. 46
ISIN; WKN; Common Code; Trading Symbol .......................................... 46
Transferability; Prohibitions on Disposal .............................................. 46
Notices; Paying and Registration Agent ............................................... 47
Designated Sponsors . . . .......................................................... 47
REASONS FOR THE OFFERING AND USE OF PROCEEDS ............................... 48
CAPITALIZATION AND INDEBTEDNESS, WORKING CAPITAL ........................... 49
Capitalization .................................................................. 49
Net Financial Debt .............................................................. 49
Contingent and Indirect Liabilities ................................................... 50
Statement on Working Capital ...................................................... 50
EARNINGS PER SHARE AND DIVIDEND POLICY. ..................................... 51
SELECTED CONSOLIDATED FINANCIAL AND OTHER OPERATING DATA. ................. 52
i

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS .............................................................. 55
Introduction ................................................................... 55
Description of Key Line Items in the Income Statement ................................... 59
Results of Operations for the Years 2008, 2009 and 2010 and the First Quarters of 2010 and 2011 . . . 61
Liquidity and Capital Resources .................................................... 70
Pension Obligations. ............................................................. 77
Quantitative and Qualitative Information on Market Risks ................................. 78
Critical Accounting Policies ....................................................... 78
Additional Information on our Unconsolidated Financial Statements for the Financial Year 2010 ..... 82
INDUSTRY ..................................................................... 83
Market Overview ............................................................... 83
Competition ................................................................... 85
Customers. .................................................................... 85
Suppliers and Distribution ......................................................... 85
Steel Volumes .................................................................. 85
Steel Prices .................................................................... 86
Consolidation .................................................................. 86
BUSINESS. ..................................................................... 87
Overview ..................................................................... 87
Our History. ................................................................... 89
Our Strengths .................................................................. 90
Our Strategy ................................................................... 91
The Acquisition of Macsteel ....................................................... 92
The Acquisition of Frefer ......................................................... 93
Products and Services . . .......................................................... 93
Local Presence ................................................................. 96
Customers. .................................................................... 100
Sales and Distribution . . .......................................................... 101
Inventory Management and Logistics ................................................. 101
Procurement ................................................................... 101
Employees .................................................................... 102
Organization; Material Subsidiaries .................................................. 102
Real Estate .................................................................... 103
Intellectual Property Rights ........................................................ 104
Environmental Matters . .......................................................... 104
Insurance ..................................................................... 104
LEGAL PROCEEDINGS . .......................................................... 105
Fine Imposed and Additional Investigations by the French Competition Authority ................ 105
Investigations by the Spanish Competition Authority ..................................... 105
Asbestos Claims ................................................................ 105
MTU Friedrichshafen GmbH/Allianz SE vs. Röhrenlager Mannheim GmbH .................... 105
Xella Thermopierre S.A. vs. ODS B.V. ............................................... 106
MATERIAL AGREEMENTS ........................................................ 107
Convertible Bonds. .............................................................. 107
Senior Revolving Credit Facility .................................................... 109
Promissory Notes (Schuldscheindarlehen). ............................................. 111
Bilateral Credit Facilities of International Subsidiaries .................................... 112
ABS Programs ................................................................. 113
RELATED PARTY TRANSACTIONS ................................................. 115
MANAGEMENT ................................................................. 116
Overview ..................................................................... 116
Management Board .............................................................. 117
Supervisory Board. .............................................................. 121
Specific Information on the Members of the Management Board and the Supervisory Board ........ 125
Shareholders’ General Meeting ..................................................... 126
Corporate Governance . . .......................................................... 127
ii

GENERAL INFORMATION ON THE COMPANY ........................................ 128
Company Formation, Name, Registered Office and Financial Year ........................... 128
Duration and Dissolution .......................................................... 128
Corporate Purpose ............................................................... 128
Independent Auditors . . .......................................................... 128
Disclosure Requirements for Shareholdings ............................................ 129
DESCRIPTION OF SHARE CAPITAL ................................................. 131
Issued Share Capital . . . .......................................................... 131
Certification and Transferability of Shares ............................................. 131
General Information on Capital Measures. ............................................. 131
Statutory Subscription Rights. ...................................................... 132
Exclusion of Minority Shareholders .................................................. 132
Capital Increase for the New Shares. ................................................. 132
Authorized Capital .............................................................. 132
Conditional Capital .............................................................. 134
Convertible Bonds. .............................................................. 137
Repurchase of Own Shares; Treasury Shares ........................................... 139
Management and Employee Participation Plans ......................................... 140
Listing ....................................................................... 140
TAXATION IN THE FEDERAL REPUBLIC OF GERMANY ................................ 141
Taxation of the Company ......................................................... 141
Taxation of Shareholders .......................................................... 142
TAXATION IN LUXEMBOURG ..................................................... 148
Taxation of Income Derived from and Capital Gains Realized on the Shares by Luxembourg Resident
Taxpayers ................................................................... 148
Taxation of Income Derived from and Capital Gains Realized on the Shares by Luxembourg Non-
Resident Taxpayers . . .......................................................... 149
Other Taxes ................................................................... 150
FINANCIAL INFORMATION ....................................................... F-1
RECENT DEVELOPMENTS AND OUTLOOK .......................................... O-1
SIGNATURES ................................................................... S-1
iii

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SUMMARY
The following summary is intended to be read as an introduction to this prospectus. It summarizes only selected
information from the prospectus. Investors should read the entire prospectus before making an investment decision
regarding the shares and subscription rights described herein. Klöckner & Co SE, Duisburg, Germany (the
“Company”, and together with its subsidiaries on a consolidated basis “we”, “us”, “our”, the “Klöckner & Co
Group”, “Klöckner & Co” or the “Group”), along with Deutsche Bank Aktiengesellschaft, Frankfurt am Main,
Germany, and J.P. Morgan Securities Ltd., London, United Kingdom (the “Joint Global Coordinators”) and
COMMERZBANK Aktiengesellschaft, Frankfurt am Main, Germany, HSBC Trinkaus & Burkhardt AG, Düsseldorf,
Germany, The Royal Bank of Scotland N.V. (London Branch), London, United Kingdom, and UniCredit Bank AG,
Munich, Germany (together with the Joint Global Coordinators, the “Underwriters”), assume responsibility for the
content of this summary in accordance with section 5(2) sentence 3 no. 4 of the German Securities Prospectus Act
(Wertpapierprospektgesetz — WpPG). We and the Underwriters can be held liable for that content, however only if
the summary is misleading, inaccurate or contradictory when read in conjunction with the other portions of this
prospectus. If an investor files claims in court on the basis of the information contained in this prospectus, the
plaintiff investor may be required by the laws of the individual member states of the European Economic Area to
bear the cost of translating the prospectus before the proceedings begin.
Overview
Our business
We are the largest producer-independent steel and metal distributor in the combined European and North American
markets measured by sales (source: Eurometal and our market data aggregation based on 2010 sales). In Europe,
we are among the three largest warehousing multi-metal distributors measured by sales, including competitors that are
controlled by steel or metal producers (source: Eurometal). In the United States, measured by sales, we believe that we
are among the leading distributors of heavy carbon steel, our main focus in this market, and the tenth-largest
warehousing multi-metal distributor overall. After giving effect to the acquisition of Macsteel, one of the leading
service center companies in the United States, we believe we are the third-largest multi-metal distributor and steel
service center in the United States. We operated from 246 distribution locations in 15 countries throughout Europe and
North America and had 9,699 employees as of December 31, 2010. Through our recent acquisitions, we have
increased our steel service center activities focused on the automotive and engineering sectors, thereby increasing our
value added services with higher margin potential. Moreover, steel service centers include customers that enter into
longer term master agreements providing for more stability in our business.
Our main business is the distribution of steel products including service center activities (78.1% of total sales
in 2010) and aluminum products (7.2% of total sales in 2010). We act as a link between producers and
manufacturing customers and our position as a producer-independent supplier allows our customers to benefit
from centrally coordinated purchases and from our broad local and global procurement capabilities. We purchase a
range of steel and aluminum products from the producers in bulk, warehouse these products and sell and deliver
them in smaller lots in accordance with our customers’ needs. We offer various value-added services, including
cutting-to-length services, plasma cutting, shot-blasting, priming and bending, in particular through our increasing
steel service center activities. In a number of our markets, we also distribute products other than steel and
aluminum, such as non-ferrous metals and tools and industrial hardware, which in aggregate represented 14.7% of
our total sales in 2010. We sell most of our products through our distribution locations. To a limited extent, we also
arrange for direct sales, which involve direct shipment of products from the metal producer to our customers. Direct
shipping accounted for approximately 10.8% of our sales in 2010. We usually buy and sell steel and other metals at
market prices and have historically been able to pass on changes in market prices to our customers. Our sales are for
the most part done on a spot basis and when we enter into long-term fixed price supply contracts with producers, we
generally have corresponding sales commitments and do not engage in speculative trading.
We have more than 170,000 active customers who have purchased from us during 2010. None of our customers
accounted for more than 1.5% of our total sales in 2010. Our customers are mainly small and medium-sized steel
consumers (and some larger customers in our steel service center business) in diverse industry sectors, such as
construction, industrial machinery and equipment, on-sellers, appliances/durable goods manufacturers and automotive.
We hold a wide range of inventory and are able to deliver on short notice flexible order sizes of products
customized to our clients’ needs. This readily available inventory allows for one-stop shopping and, together with
the reliable and timely delivery of products made possible by our extensive geographical distribution network,
results in strong and loyal relationships with our customers, the majority of whom are repeat customers. With our
acquisition of Becker Stahl-Service GmbH (“Becker Stahl”) in 2010, we added what is in our opinion the largest
single-site steel service center in Europe to our distribution network with high flexibility to deliver on short notice
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almost all specifications covered; we also increased our purchasing power for flat steel significantly and diversified
our customer base, thereby reducing the share of the construction industry. With our acquisition of Macsteel we will
expand our business in the United States currently focused on long and plate products with a broad range of sheet
and slit coil flat rolled steel service center products. We believe that the acquisition will in particular support our
strategy to expand the flat steel product steel service center business with industrial customers.
Historically, we have generally been able to pass on changes in market prices to our large and diverse customer
base that is traditionally more focused on readily available inventory and reliable as well as timely delivery of
flexible order sizes. Moreover, each of our distribution locations adapts its product and services offering to the
requirements and demands of the local markets. For example, in our distribution locations in Switzerland we offer a
wide range of hardware products to relatively small construction and mechanical engineering businesses, whereas
in the United Kingdom, we offer special steel sections, known as cellular beams, to address specific construction
practices in this market.
Our suppliers include large steel and metal producers such as ArcelorMittal, Corus, ThyssenKrupp, Nucor and
Alcoa, as well as regional, specialized steel producers such as Riva/Ilva, Celsa, Corrugados Gallardo and Gerdau
Ameristeel. As an independent metal distributor, we are able to optimize our purchasing strategy independently and
have the flexibility to source from a variety of steel and metal producers. In addition, we believe that our relatively
large size, when compared to local and regional multi-metal distributors, provides us with a competitive advantage
because we are generally able to negotiate volume discounts and improved payment terms with the steel and metal
producers. We believe that we are an important customer for steel and metal producers because we account for a
significant portion of these producers’ sales. At the same time, we are an important part of the distribution network
for steel and metal producers, as we reach a customer base that steel and metal producers do for the most part not
target directly, given our customers’ needs for intermittent deliveries of small quantities of customized products.
Our customers also value our ability to deliver products on short notice as metal producers generally have much
longer delivery times. This includes steel and metal producers with their own distribution operations, whose
production capacity exceeds the capacity of their own distribution networks and their direct sales combined.
Since the IPO in 2006, Klöckner & Co has transformed itself significantly. The implementation of our business
optimization initiatives has resulted in stronger central control of our business, especially in the area of purchasing,
product management and IT. More recently, we have launched initiatives to optimize and harmonize processes in
logistics and warehousing operations. In our opinion the responsive and tight net working capital management
during the financial crisis is an evidence of our optimization process. Our continuous acquisition activities have also
had a significant impact on our business, reinforcing our market position in Europe and strongly expanding our
footprint in the United States. In 2011 we entered the Brazilian market through the acquisition of Frefer. With the
acquisitions of Becker Stahl and Macsteel we have also expanded our steel service center activities substantially,
which we believe will result in a more balanced and stable business model. At the same time, we have been able to
reduce our dependency on the construction industry. We plan to continue this transformation process via our
Klöckner 2020 strategy outlined below.
Industry overview
As intermediaries between producers and purchasers of steel and metal products, metal distributors serve a key
role in the market. The producers of steel and metal products primarily sell their products in large quantities and
with long delivery times, while our end customers generally purchase smaller amounts and require product
customization with short delivery times. For example, in 2010, the average order size of our customers was less than
0.5 tons per item, while we believe that steel mills typically do not deliver in order lots of less than 10-25 tons per
item and also typically require orders with six to ten weeks lead time. Metal distributors fill this gap by purchasing
large quantities of goods with long delivery times from steel producers and then offering their customers short
delivery times, smaller quantities, customized products and on-site delivery. At the same time, metal distributors
enable their customers to maintain low stock levels, because they provide the availability of inventories on short
notice. Some producers also sell small shares of their production through their own distribution channels.
Steel is the most widely used metal in Europe and North America. In line with the broader market, we
generated approximately 78.1% of our 2010 sales from steel products.
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Our Strengths
Largest producer-independent steel and metal distributor in the combined European and North American
markets
As the largest manufacturer-independent steel and metal distributor in the combined European and
North American markets and among the Top-3 distributors in the core European market where we are active,
we believe that our size provides us with significant competitive advantages over smaller competitors. Our
extensive geographic network of 246 distribution locations as of December 31, 2010 enables us to offer rapid and
reliable delivery of our broad range of products and services, which allows our customers to turn to us for one-stop
shopping for their metals requirements. Our customers typically value the fact that they can source all the products
(flat and long steel products, aluminum, stainless, etc) they need from a single location. While our centralized
sourcing enables us to obtain attractive volume discounts and improved payment terms from suppliers, we believe
that the size of our distribution network with its central, regional and specialty distribution locations gives us an
advantage over smaller competitors due to our ability to centralize stocks of less frequently requested products,
thereby reducing overall stock levels without compromising the availability of products. In addition, we believe that
our independence from steel producers enables us to be more flexible than mill-tied distributors and better able to
react to changes in supply and demand in the marketplace, as we can source products from a variety of suppliers. At
the same time, we are an important customer for many of our suppliers, including steel and metal producers with
their own distribution operations, whose production capacity exceeds the capacity of their own distribution
networks and their direct sales combined.
Broad and diversified customer bases in Europe and North America
We have more than 170,000 active customers who purchased from us during 2010 in the 15 countries in which
we operate in Europe and North America. These customers are mainly small and medium-sized businesses, with an
average order size of approximately EUR 1,200. In 2010, no single customer accounted for more than 1.5% of our
total sales. We believe that in particular our smaller customers are generally less price-sensitive than large industrial
users of steel that purchase directly from the steel producers (although the financial crisis has led to increased price
sensitivity of our customers, too). Our customers are involved in a wide variety of industries, such as construction,
industrial machinery and equipment, on-sellers, appliances/durable goods manufacturers and automotive. Through
the acquisition of Becker Stahl in 2010 we have diversified our industry split and increased the share of automotive
while the share of the construction industry, which has been severely hit by the financial crisis, has decreased. The
acquisition of Becker Stahl also added a significant steel service center presence to our operations. We believe that
the diversity of the geographies and the relatively wide range of industries in which we operate and of our customer
base make us less vulnerable to regional or industry-specific downturns.
Flexible business model in different economic cycles
We buy steel and other metals in bulk at market prices and have generally been able to pass on price increases
to our customers to whom we sell and deliver our inventories in smaller lots. Our large and diverse customer base
primarily values service and availability in addition to pricing. Since we have only limited long-term purchase
commitments, we can better adjust our sourcing and inventory volumes to reduced demand as we did during the
economic crisis in 2008 and 2009. During that period, we significantly reduced our operating costs and our net
financial debt. Among other measures, we reduced our total headcount. We believe that these actions have put us
into an advantageous competitive position.
Historically, we have been able to generate considerable cash flows and maintain a strong liquidity position
during periods of falling demand and steel prices. Steel price decreases result in price driven losses in our
inventories, but also in a reduction of our net working capital requirements due to the lower replacement cost of
inventories and the lower volume of trade receivables. As a result, we generate high cash flows and enjoy a strong
liquidity position at least for a significant period of time while steel prices are falling. For instance, since the
beginning of the fourth quarter of 2008 until December 31, 2009, a period of rapidly falling steel prices, we reduced
our working capital levels by EUR 1.083 million, or 63%, to EUR 637 million, which together with a capital
increase in September 2009 enabled us to build up a cash balance of EUR 149.6 million, all as of December 31,
2009. By contrast, in 2010 and the first quarter of 2011, higher steel prices and an increase in overall sales volumes
led to an increase in working capital with further capital used to fund our acquisitions. While part of these funding
requirements were covered by a rising operating cash flow from improved earnings, net debt increased to
EUR 136.9 million as of December 31, 2010.
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Unlike a steel producer, we do not operate extensive production facilities and our comparatively low capital
expenditure requirements and more flexible business model enable us to adapt more easily to a challenging
environment such as the economic crisis in 2008 and 2009.
Our capital structure benefits from a relatively strong equity position of 34.9% of total assets as of March 31,
2011, diverse sources of working capital and other debt financing and the absence of performance based covenants
from our Senior Revolving Credit Facility and ABS Programs. We believe that our comfortable capital base giving
effect to this offering will position us well to take advantage of growth opportunities through acquisitions and to
finance increased working capital requirements as economic conditions have improved.
Experienced and proactive management with strong track record
We believe that we have a dedicated, ambitious, loyal and competent management team with substantial
experience in the multi-metal distribution business as well as other relevant industry experience. In years of growth,
our management team has demonstrated its ability to follow a disciplined acquisition strategy and since 2006
successfully acquired and integrated several new businesses. Since our IPO in 2006, our management team has also
proven its capability by successfully implementing various restructuring programs which achieved significant cost
reductions and optimized inventory management and sourcing strategies. For example, our management team sold
the Canadian business Namasco in May 2008 (the transaction closed in July 2008), quickly responded to a
challenging economic environment by initiating an immediate action program in October 2008 and expanding it in
March 2009 with the goal of reducing operating costs and net financial debt as well as retaining flexible financing
resources and liquidity. We also successfully restructured our Senior Revolving Credit Facility and our European
ABS program by eliminating performance based covenants, executed a capital increase in difficult market
conditions in 2009 and issued another long term convertible bond in 2010.
Well positioned for future growth
We believe that Klöckner & Co is well positioned for future growth opportunities in our established, and in
prospective new markets. In our established markets, especially in Western Europe and the United States, we have
in our opinion significant potential opportunities for growth over the next years. We expect the steel markets in these
two regions to continue to recover and to display growth rates ahead of general gross domestic product (GDP)
growth rates. We have implemented a lower cost base and leaner structures through our restructuring during the
crisis in 2009, which together with our strong balance sheet following our capital market activities, has in our
opinion improved our competitive position. We believe that this positions us well to take advantage of the growth
opportunities compared to our smaller and less well capitalized competitors. We believe that our recent successful
acquisitions, such as Becker Stahl in 2010 with its focus on profitable and stable growth steel service center
activities, demonstrate the opportunities for fast and value-additive external growth in the current environment. The
acquisition of Macsteel in 2011 in the United States represents a further step to implement our acquisition strategy,
demonstrates our ability to act on market opportunities and we expect will further strengthen our position in the US
market through a broader product offering and a higher service proportion. Besides our established markets, we see
strong opportunities for growth in emerging markets and through our recent acquisition of Frefer, a Brazilian metal
distributor, made a first step into this area. We believe that these initiatives position us well to achieve our strategic
goal to develop Klöckner & Co into the first global multi-metal distributor.
Our Strategy
In October 2010, we unveiled our new long-term growth strategy, “Klöckner & Co 2020”. The upheaval
created by the financial crisis and the resulting changes in economic conditions made it necessary to adjust our
strategy that we had implemented largely without any changes since our IPO in 2006. The altered situation has
resulted in steel consumption rates significantly below their pre-crisis levels in industrialized countries for years
after the drastic collapse in 2009, while in developing countries, on the other hand, the growth trend has continued
virtually uninterrupted. Against this background, we have redefined our strategy, focusing on the potential for
further optimization. The strategy is based on the four pillars external growth, organic growth, business optimization
and management and personnel development, highlighting prospects and guidelines for the next ten years.
We want to develop Klöckner & Co into the first truly global multi-metal distributor. Subject in particular to
identifying and closing suitable acquisitions, our growth targets include doubling our sales volumes in five years
and tripling or quadrupling them by the year 2020.
External growth: In our slower-growth European core market, we will focus on acquiring companies with
higher-margin products, services, and customer segments, reducing our exposure to the construction industry. In
North America, we want to significantly expand our market share, including through major acquisitions. Our recent
4

acquisition of Macsteel is an important step towards that goal. Long-term, we want to secure a high growth rate by
entering emerging markets, where we believe steel consumption will develop more dynamically than in established
markets. We believe balancing our geographic reach will make us less exposed to different economic cycles and
provide us with additional growth opportunities. We plan to focus on Brazil and China as entry points with different
approaches. We have recently entered the Brazilian market through the acquisition of the Frefer group in May 2011
and may consider further acquisitions of independent distributors. We will enter the Chinese market by establishing
a medium-sized service center to service local subsidiaries of international companies and have recently rented the
related facilities. We intend to differentiate ourselves from local competitors in China with just-in-time-delivery,
added services, reliability and payment terms.
Organic growth: The basic economic conditions in our core markets of Europe and North America have
changed considerably. While previously we were selling into a growing market, we now face tough competition for
a smaller market size. Consequently, we intend to significantly increase our focus on the customer to offer
customized products and services to expand our market share. At the same time, we want to increase customer
loyalty as well as customer benefits and intend to approach our customers more proactively, better marketing the
advantages of our international network. In addition, we are going to further expand our product portfolio to include
higher-margin products (focusing on sheets, plates, hollow sections, tubes and aluminum) and increase processing
services offered. We believe this will make our business model less exposed to fluctuating steel prices and that
integration along the value added chain should have a positive effect on our margin.
Business optimization: For a global distributor such as Klöckner & Co, we believe that optimized, harmonized
processes are a decisive success factor and a way of differentiating ourselves from the competition. As a
result, we continue to place high priority on our efforts to optimize procurement, our logistics network and IT. We
have established a new department “Operations Europe” to coordinate and monitor our various operations. By
further improving our reliability and quality together with enhancing efficiency, we will seek to continue to compete
by offering best in-class solutions and continuously expanding our competitive edge.
Personnel and management development: As a service company, one of the main prerequisites for implementing
our ambitious growth plans will be to develop our employees and managers. Well trained and motivated
employees are key to our success. Therefore, we are currently developing better programs to expand significantly
the training and education of our employees and senior officers, thereby making us more attractive as an employer.
Use of Proceeds
We estimate that the proceeds from the offering, net of underwriting fees and other offering expenses, will be
approximately EUR 514.5 million. We intend to use the net proceeds of the offering, together with our current cash
and future cash flow from operations, primarily to continue to pursue investment opportunities for our business, and
for general corporate purposes. We expect investment opportunities to include acquisitions of other metal
distributors and steel service centers, with the goal of expanding our customer base and regional product portfolios
in existing and new markets. Consistent with our strategy, these acquisitions could be significant. With the proceeds
from the offering we aim to keep our net indebtedness and our equity ratio at a level we consider to be appropriate.
5

Selected Consolidated Financial and Other Operating Data
The following tables summarize selected historical consolidated financial information for Klöckner & Co SE
as of and for the years ended December 31, 2008, 2009 and 2010 and the three month periods ended March 31, 2010
and 2011, all in accordance with IFRS as adopted by the EU. The summary historical consolidated financial
information for the years ended December 31, 2008, 2009 and 2010 has been derived from Klöckner & Co SE’s
audited consolidated financial statements for such periods, which have been audited by KPMG Hartkopf + Rentrop
Treuhand KG Wirtschaftsprüfungsgesellschaft, Cologne, Germany (for the financial years ended December 31,
2008 and 2009), and KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, Germany (for the financial year ended
December 31, 2010), and the summary historical consolidated financial information for the three month periods
ended March 31, 2010 and 2011 has been derived from Klöckner & Co SE’s unaudited interim consolidated
financial statements for such periods. In our consolidated financial statements for the year ended December 31,
2009, certain comparison amounts relating to the income statement for the year ended December 31, 2008 have
been amended from the amounts reported in the relevant historical consolidated financial statements due to the
initial application of IFRIC 14. IFRIC 14 provides general guidance on how to assess the limit IAS 19 places on the
amount of the surplus of a pension plan that can be recognized as an asset. In the tables below, amounts derived from
the consolidated income statement and balance sheet data for the years 2008 and 2009 include such adjusted
numbers.
Years ended December 31, Three months ended March 31
2008 2009 2010 2010 2011
(unaudited) (unaudited)
(in thousands of EUR)
Selected data from the consolidated
income statement
Sales ........................... 6,749,595 3,860,493 5,198,181 1,048,841 1,586,799
Other operating income .............. 371,182 127,359 35,822 8,028 8,475
Change in inventory (1) ............... 10,832 (8,661) (7,383) (698) 7,342
Own work capitalized ............... 73 10 39 5 —
Cost of materials . . . ................ (5,394,417) (3,206,830) (4,054,830) (812,538) (1,241,008)
Personnel expenses . ................
Depreciation, amortization and
(546,017) (441,184) (486,618) (111,180) (131,520)
impairments .................... (67,372) (109,638) (85,783) (18,393) (18,653)
thereof impairment losses. .......... — (41,782) — — —
Other operating expenses. ............ (590,612) (399,684) (447,442) (103,372) (125,589)
Operating result .................. 533,264 (178,135) 151,986 10,693 85,846
Income from investments. ............ — 2 5 — —
Financial result ................... (69,782) (61,699) (67,650) (15,156) (19,350)
Income before taxes. ............... 463,482 (239,832) 84,341 (4,463) 66,496
Income taxes. .....................
Net income attributable to minority
(79,308) 54,168 (4,129) 6,194 (22,350)
interests .......................
Net income attributable to Klöckner &
(14,161) 2,820 2,671 565 684
Co SE shareholders ............... 398,335 (188,484) 77,541 1,166 43,462
Net income ......................
Selected data from the consolidated
balance sheets
384,174 (185,664) 80,212 1,731 44,146
Non-current assets. ................
Of which
811,727 711,916 855,961 859,633 806,859
Intangible assets ................. 235,931 194,985 227,323 244,053 210,797
Property, plant and equipment ....... 479,421 426,151 524,169 506,279 507,376
Current assets ....................
Of which
2,272,041 2,000,846 2,635,134 2,181,046 2,973,352
Inventories ..................... 1,000,612 570,918 898,841 798,354 1,043,235
Trade receivables ................ 798,618 464,266 703,101 689,512 924,641
Cash and cash equivalents (2) ........ 296,636 826,517 934,955 614,559 927,931
Total assets ...................... 3,083,768 2,712,762 3,491,095 3,040,679 3,780,211
6

Years ended December 31,
Three months ended March
31
2008 2009 2010 2010 2011
(unaudited) (unaudited)
(in thousands of EUR)
Equity (including minority interests). .. 1,081,352 1,123,263 1,290,494 1,137,412 1,318,158
Non-current liabilities ..............
Of which
Provisions for pensions and similar
1,176,576 926,758 1,361,392 1,001,346 1,406,748
obligations. ...................
Other provisions (including deferred
180,095 174,598 174,442 177,143 173,486
tax liabilities) ................. 123,797 102,316 111,423 103,538 101,459
Financial liabilities ............... 813,000 618,744 1,020,582 668,448 1,097,112
Current liabilities .................
Of which
825,840 662,741 839,209 901,921 1,055,305
Other provisions ................. 284,766 109,868 107,259 107,588 101,928
Financial liabilities ............... 48,112 52,169 39,578 90,776 45,935
Other liabilities .................. 81,640 51,650 76,120 60,347 78,951
Trade payables .................. 392,183 398,387 584,614 620,038 804,704
Total equity and liabilities ...........
Selected data from the consolidated cash
flow statement
3,083,768 2,712,762 3,491,095 3,040,679 3,780,211
Cash flow from operating activities ..... 186,884 564,662 35,188 (60,366) (69,370)
Cash flow from investing activities ..... 72,090 (8,032) (187,748) (127,313) (5,318)
Cash flow from financing activities ..... (123,439) (23,848) 251,974 (26,196) 70,616
Changes in cash and cash equivalents ..
Other selected financial data and
business information (unaudited)
135,535 532,782 99,414 (213,875) (4,072)
Tons shipped (in thousands of tons) ..... 5,974 4,119 5,314 1,180 1,498
Gross profit (3) ..................... 1,366,083 645,012 1,136,007 235,610 353,133
(4) (5)
EBITDA .................... 600,636 (68,495) 237,774 29,086 104,499
EBITDA, adjusted (6) ................ 406,491 — — — —
Basic earnings per Share (IFRS) in EUR . . 8.56 (3.61) 1.17 0.02 0.65
Capital expenditures (7) ............... 48,111 25,023 26,976 3,966 6,011
Total financial liabilities ............. 861,112 670,913 1,060,160 759,224 1,143,047
Financing costs .................... 6,312 5,977 11,669 5,263 12,186
Total debt (8) ...................... 867,424 676,890 1,071,829 764,487 1,155,233
Net financial debt (9)
................ 570,788 (149,627) 136,874 149,928 227,302
(1) Change in inventory represents the difference in the amount of work in progress and finished goods at period end compared to the beginning
of the period, adjusted for currency effects. Most of our inventory consists of merchandise, changes of which are not reflected in this item,
but included in cost of materials.
(2) Cash and cash equivalents include cash, cash equivalents and marketable securities and, for the year ended December 31, 2008,
EUR 3.105 million in restricted cash.
(3) Gross profit represents sales plus change in inventories and capitalized expenses for own work, less cost of materials.
(4) EBITDA represents net income plus financial result, income taxes, depreciation and amortization and impairment losses for the relevant
period. EBITDA is not a recognized term under IFRS and does not purport to be an alternative to data from the income or cash flow statement
prepared in accordance with IFRS. We are not presenting EBITDA here as a measure of our operating results. Our management believes that
the presentation of EBITDA is helpful to investors as a measure of our ability to generate cash and to service debt. However, you should not
construe EBITDA as an alternative to net income determined in accordance with IFRS or to cash flows from operating activities, investing
activities or financing activities as a measure of cash flows. In particular, an increase in EBITDA may be accompanied by increased working
capital requirements, whereas a decreased EBITDA may be accompanied by a working capital release. However, there is no uniform
definition of EBITDA, which means that EBITDA shown by other companies may not necessarily be comparable with EBITDA of the
Klöckner & Co Group.
7

(5) The following calculation shows a reconciliation of net income to EBITDA:
Years ended December 31,
Three months ended
March 31
2008 2009 2010 2010 2011
(unaudited)
(in thousands of EUR)
(unaudited)
Net income . .................................... 384,174 (185,664) 80,212 1,731 44,146
Income taxes . . . ............................... 79,308 (54,168) 4,129 (6,194) 22,350
Financial result . . ...............................
Amortization on intangible assets and depreciation of property,
69,782 61,699 67,650 15,156 19,350
plant and equipment and impairment losses thereon . . ...... 67,372 109,638 85,783 18,393 18,653
EBITDA ....................................... 600,636 (68,495) 237,774 29,086 104,499
(6) EBITDA, adjusted, for the year ended December 31, 2008, excludes gains of approximately EUR 273.4 million from divestitures in 2008,
and adds back the net effect of EUR 79.3 million in 2008 of a French antitrust fine.
(7) Capital expenditures represent payments for intangible assets, property, plant and equipment.
(8) Total debt before deduction of financing costs.
(9) Net financial debt represents current and non-current financial liabilities before deduction of financing costs less cash and cash equivalents.
8

Summary of Risk Factors
The Klöckner & Co Group is subject to a number of risk factors that could adversely affect its business,
financial condition and results of operations. The following is a summary of these risks.
Risks Related to Our Business
Given the dependence of our industry on global economic conditions, the recent global economic crisis has
materially and adversely affected our business, results of operations and financial condition, and a continued
economic recovery will be important for the future of our business.
Our financial condition and results of operations depend in large part on the prices for metals. These prices
are inherently volatile, and rapid price changes could materially and adversely affect our profitability and
cash flow.
A failure to manage our working capital successfully could materially and adversely affect our profitability
and liquidity.
We service customers in industries that are cyclical and potentially significantly affected by economic
conditions, including the economic crisis, and downturns in these industries are reducing our sales and
profitability.
Our business is very competitive and increased competition as well as further consolidation could impact our
sales and profitability.
The global economic crisis had a negative impact on our customers, including the risk of insolvency, which
in turn has materially and adversely affected our results of operations and financial position.
Our financial condition and results of operations may be materially and adversely affected if we are unable to
control our operating costs.
Currency and interest rate fluctuations may have a material impact on our financial condition and results of
operations.
Our acquisition strategy exposes us to risks; we may not be able to identify, finance, manage or integrate
recent and future acquisitions, and acquisitions may prove to be unsuccessful, which could adversely affect
our growth and profitability.
In the course of our acquisitions, we have capitalized significant intangible assets which are subject to
amortization and impairment tests.
Our competitive position depends on our management team, and a loss of important members of our
management team could have a material adverse effect on our business.
We are subject to risks and uncertainties in the countries in which we operate and in new markets into which
we may expand.
Lead time in obtaining our supplies and the cost of our products could increase if we were to lose one of our
primary suppliers.
Damage to or delays in the upgrade of our information technology infrastructure could harm our business.
Investigations by competition authorities and damage claims from third parties for violations of applicable
antitrust laws could adversely affect our financial condition and results of operations.
Strikes or other labor-related conflicts at the Klöckner & Co Group, in the steel or metal industries or in
certain customer industries could have an adverse effect on our business.
We could incur substantial costs in order to comply with, or to address any violations of or liabilities under,
environmental laws, both in Europe and in North America, that could significantly increase our operating
expenses and negatively affect our financial condition and results of operations.
We have significant liabilities with respect to our pension plans and the actual costs of our pension plan
obligations could exceed current estimates.
If costs arising in connection with our intra-group restructurings and financings are not recognized for tax
purposes, or if tax or social security authorities assert subsequent claims on other grounds, this could have a
material adverse effect on the financial condition and results of operations of the Klöckner & Co Group.
9

Our insurance policies provide limited coverage, potentially leaving us uninsured against some business
risks.
We may face significant product liability or warranty claims that may be costly, and which could negatively
affect our financial condition and results of operations, and create adverse publicity.
If we fail to meet our obligations under our financing agreements, our creditors could declare all amounts
owed to them due and payable, which could lead to liquidity constraints.
We may incur significant indebtedness, which may impair our financial and operating flexibility.
Our ability to generate sufficient cash to service our debt depends on many factors beyond our control.
Lack of available funding and higher costs for funding in the difficult current credit conditions may have a
material impact on our financial condition and results of operations.
Volatility in the commercial paper market and the solvency of certain financial institutions may affect
funding costs or our ability to receive cash under our ABS Programs.
We are subject to restrictive debt covenants, which may limit our operating flexibility.
Klöckner & Co SE is a holding company and dependent on dividend payments from its subsidiaries,
affecting its own ability to pay dividends.
Risks Related to the Offering
The capital markets and the price of our shares have been and may continue to be volatile.
The holdings of shareholders who do not participate in this offering will be diluted.
If the offering is not completed, or if our share price significantly decreases, the subscription rights could
become worthless.
It is not certain that an active trading market will develop for the subscription rights. If such trading does
develop, the subscription rights may be subject to greater price fluctuations than our shares.
If shareholders sell a large volume of our shares, this could cause significant downward pressure on the price
of our shares.
Summary of the Offering
Subscription offer ................ OurmanagementboardresolvedonMay26,2011,withtheapprovalof
the supervisory board on May 26, 2011, to increase our issued share
capital by EUR 83,125,000 from EUR 166,250,000 to EUR 249,375,000,
under the authorization granted in Section 4, para. 5a of our articles of
association, by issuing 33,250,000 new ordinary registered shares with no
par value (the “New Shares”). The New Shares carry full dividend rights
from January 1, 2011.
The New Shares are being subscribed for by the Underwriters, who, in
accordance with section 186 (5) sentence 1 of the German Stock
Corporation Act (Aktiengesetz — AktG), have undertaken to offer
them for subscription to our shareholders. 2 subscription rights entitle
their holder to subscribe for 1 New Share.
The registration of the capital increase in the commercial register of
the local court of Duisburg is scheduled for June 8, 2011.
Exercise of subscription rights. ...... Shareholders will be requested, through the publication of the subscription
offer scheduled for May 26, 2011, to exercise their subscription
rights during the subscription period from May 27, 2011,
through June 9, 2011 (in each case including such dates), to avoid
being excluded from exercising those rights.
Shareholders may subscribe for 1 New Share of the Company for
every 2 existing shares, at the subscription price.
10

Subscription price ................ Thesubscription price per New Share is EUR 15.85. The subscription
price must be paid no later than June 9, 2011.
Trading of subscription rights ....... Thesubscription rights (ISIN DE 000A1KRDK2) for the New Shares
will be traded during the period from May 27, 2011 up to and
including June 7, 2011 on the regulated market (XETRA Frankfurt
Specialist) of the Frankfurt Stock Exchange. From May 27, 2011
onward, our existing shares will be quoted on the Frankfurt Stock
Exchange without subscription rights (ex Bezugsrecht). Deutsche
Bank Aktiengesellschaft may effect suitable transactions to provide
liquidity for fair and orderly trading in subscription rights.
Lock-up ........................ In the underwriting agreement signed on May 26, 2011, we have
agreed with the Underwriters that, to the extent legally permissible, we
will not, without the prior consent of the Joint Global Coordinators,
which may not be unreasonably withheld or delayed, for a period of
six months from the date of first trading of the New Shares, issue or,
directly or indirectly, sell, offer, contract to sell, or otherwise transfer
or dispose of, pledge or create or grant another security interest in any
of our shares, options on such shares, or securities that can be converted
into or exchanged for such shares or that carry rights to acquire
such shares. With certain exceptions, we also agreed not to announce
any capital increase from authorized capital, or to initiate a capital
increase, or to enter into other transactions the economic effect of
which would be similar to that of the measures described above.
Listing/Admission to stock exchange
trading ......................... Allofourordinary registered shares are admitted to trading on the
regulated market (regulierter Markt) of the Frankfurt Stock Exchange
and to the sub-segment of the regulated market with further postadmission
obligations of the Frankfurt Stock Exchange (Prime
Standard).
The New Shares are expected to be admitted to the regulated market of
the Frankfurt Stock Exchange, with simultaneous admission to the
sub-segment of the regulated market with further post-admission
obligations of the Frankfurt Stock Exchange (Prime Standard), on
June 9, 2011. We plan to have all of the New Shares included in the
existing quotation of the listed shares of Klöckner & Co SE on
June 10, 2011.
Delivery and settlement ............ The New Shares will be represented by a global share certificate
deposited with Clearstream Banking AG, Mergenthalerallee 61,
65760 Eschborn, Germany. Subscribers or purchasers will be credited
for their New Shares in their collective securities account. Shareholders
are not entitled to receive individual share certificates.
ISIN, WKN, Common Code, trading
symbol for the existing and the New
Shares ......................... InternationalSecurities Identification Number (ISIN): DE000KC01000
German Securities Identification Code (WKN): KC0100
Common Code: 025808576
Trading symbol: KCO
ISIN, WKN for the Subscription
Rights ......................... ISIN DE000A1KRDK2 / WKN A1K RDK
11

Summary of General Information on the Company
Registered office and fiscal year of the
Company ....................... TheCompany has its registered office in Duisburg and is registered
under HRB 20486 in the commercial register maintained by the local
court of Duisburg. Its headquarters are located at Am Silberpalais 1,
47057 Duisburg, Germany, tel. +49-203-307-0.
The Company’s financial year is the calendar year.
Statutory auditor ................. KPMGAGWirtschaftsprüfungsgesellschaft, Berlin, Germany.
Summary of Share Capital and Management of the Company
Issued share capital ...............
Management board and supervisory
Ourissued share capital as recorded in the commercial register as of
the date of this prospectus amounts to EUR 166,250,000, divided into
66,500,000 ordinary registered shares. The shares are issued as no par
value shares, each such share with a notional value of EUR 2.50.
Following the implementation of the capital increase, our issued share
capital will amount to EUR 249,375,000, divided into 99,750,000 ordinary
registered shares.
board .......................... Ourmanagement board consists of two members as of the date of this
prospectus: Gisbert Rühl (Chairman) and Ulrich Becker.
Our supervisory board consists of six members. The chairman of the
supervisory board is Prof. Dr. Dieter H. Vogel.
Major shareholders ............... Based on the notifications that we have received in accordance with
the German Securities Trading Act (Wertpapierhandelsgesetz
—WpHG) as of the date of this prospectus, the following shareholders
hold a significant direct or indirect interest in the Company within the
meaning of sections 21 et seq. of the German Securities Trading Act:
Norges Bank (Central Bank of Norway) — 1.84% of our voting
rights;
Amundi S.A. — 3.03% of our voting rights.
12

ZUSAMMENFASSUNG
Die folgende Zusammenfassung ist als Einführung zu diesem Prospekt zu verstehen. Sie enthält nur bestimmte,
ausgewählte Informationen aus dem Prospekt. Anleger sollten den gesamten Prospekt lesen, bevor sie eine
Anlageentscheidung hinsichtlich der in diesem Prospekt beschriebenen Aktien oder Bezugsrechte treffen. Die
Klöckner & Co SE, Duisburg, Deutschland (die “Gesellschaft” und gemeinsam mit ihren konsolidierten Tochtergesellschaften
“wir”, “uns”, “unsere”, die “Klöckner & Co Gruppe”, “Klöckner & Co” oder die “Gruppe”)
sowie die Deutsche Bank Aktiengesellschaft, Frankfurt am Main, Deutschland, und J.P. Morgan Securities Ltd.,
London, Großbritannien (die “Joint Global Coordinators”) sowie die COMMERZBANK Aktiengesellschaft,
Frankfurt am Main, Deutschland, HSBC Trinkaus & Burkhardt AG, Düsseldorf, Deutschland, The Royal Bank
of Scotland N.V. (London Branch), London, Großbritannien, und die UniCredit Bank AG, München, Deutschland
(zusammen mit den Joint Global Coordinators die “Konsortialbanken”) übernehmen die Verantwortung für den
Inhalt dieser Zusammenfassung gemäß § 5 Abs. 2 Satz 3 Nr. 4 Wertpapierprospektgesetz. Die Gesellschaft und die
Konsortialbanken können für den Inhalt der Zusammenfassung haftbar gemacht werden, jedoch nur falls die
Zusammenfassung irreführend, unrichtig oder widersprüchlich ist, wenn sie zusammen mit den anderen Teilen
dieses Prospekts gelesen wird. Für den Fall, dass vor einem Gericht Ansprüche aufgrund der in diesem Prospekt
enthaltenen Informationen geltend gemacht werden, könnte der als Kläger auftretende Anleger in Anwendung
einzelstaatlicher Rechtsvorschriften der Staaten des Europäischen Wirtschaftsraums die Kosten für die Übersetzung
des Prospekts vor Prozessbeginn zu tragen haben.
Überblick
Geschäftstätigkeit
Klöckner & Co ist der größte produzentenunabhängige Stahl- und Metalldistributeur im europäischen und
nordamerikanischen Gesamtmarkt (Quelle: Eurometal und unsere Zusammenführung von Marktdaten unter
Zugrundelegung der Umsätze aus 2010). In Europa gehören wir gemessen am Umsatz zu den drei größten
lagerhaltenden Multi-Metalldistributeuren, eingeschlossen Wettbewerber, die von Stahl- oder Metallherstellern
kontrolliert werden (Quelle: Eurometal). Wir sind der Auffassung, dass wir in den Vereinigten Staaten gemessen am
Umsatz zu den führenden Distributeuren für schweren Carbonstahl, unserem Hauptgeschäftsfeld in diesem Markt,
zählen und dass wir dort insgesamt der 10. größte lagerhaltende Multi-Metallhändler sind. Im Anschluss an unsere
Akquisition von Macsteel, eines der führenden Servicecenter-Unternehmen in den Vereinigten Staaten, sind wir
unserer Auffassung nach der drittgrößte Multi-Metalldistributeur und Stahl Servicecenter in den Vereinigten
Staaten. Zum 31. Dezember 2010 betrieben wir 246 Distributionsstandorte in 15 Ländern in Europa und Nordamerika
und hatten zu diesem Datum 9.699 Mitarbeiter. Durch unsere jüngsten Akquisitionen haben wir unsere
Stahl-Servicecenter-Aktivitäten und damit unsere Mehrwert steigernden Dienstleistungen mit potentiell höheren
Gewinnspannen mit Fokus auf die Automobilindustrie und den Maschinen- und Anlagenbau ausgebaut. Stahl-
Servicecenter haben darüber hinaus Kunden, mit denen sie langfristige Rahmenvereinbarungen abschließen, was zu
einer größeren Stabilität für unser Geschäft führt.
Unser Kerngeschäft ist die Distribution von Stahlprodukten einschließlich Stahl Servicecenter-Aktivitäten
(78,1% des Gesamtumsatzes im Jahr 2010) und Aluminiumprodukten (7,2% des Gesamtumsatzes im Jahr 2010).
Wir verbinden Hersteller und weiterverarbeitende Kunden, und unsere Position als herstellerunabhängiger
Lieferant ermöglicht es unseren Kunden, von zentral koordinierten Einkäufen und von unseren breiten lokalen
und globalen Lieferkapazitäten zu profitieren. Wir kaufen eine Reihe von Stahl- und Aluminiumprodukten in
großen Mengen von den Herstellern, lagern diese Produkte und verkaufen und liefern sie dann in kleineren Mengen,
die den Bedürfnissen unserer Kunden entsprechen. Wir bieten kundenspezifische Dienstleistungen wie Sägen,
Plasma- und Brennschneiden, Sandstrahlen, Primern und Biegen vor allem durch unsere zunehmenden Stahl-
Servicecenter-Aktivitäten an. In einigen der Märkte, in denen wir tätig sind, handeln wir auch mit anderen
Produkten als Stahl und Aluminium, z.B. Nicht-Eisen-Metallen, Werkzeugen und Industriemetallwaren, die im
Jahr 2010 zusammen 14,7% unseres Gesamtumsatzes ausmachten. Die meisten unserer Produkte verkaufen wir
über unsere Distributionsstandorte. Zu einem kleineren Teil vermitteln wir auch Direktverkäufe, bei denen die
Produkte direkt vom Metallhersteller an unsere Kunden geliefert werden. Direktverkäufe machten im Jahr 2010
ungefähr 10,8% unseres Umsatzes aus. Wir kaufen und verkaufen Stahl und andere Metalle üblicherweise zu
Marktpreisen und konnten Änderungen der Marktpreise in der Vergangenheit zumeist an unsere Kunden weitergeben.
Der überwiegende Teil unserer Umsätze basiert auf kurzfristigen Handelgeschäften; soweit wir langfristige
Lieferverträge zu Festpreisen mit Herstellern eingehen, stehen dem grundsätzlich korrespondierende
Verkaufsverpflichtungen gegenüber und wir gehen keine spekulativen Geschäfte ein.
Wir haben mehr als 170.000 aktive Kunden, die im Jahr 2010 von uns gekauft haben. Mit keinem unserer
Kunden erzielten wir im Jahr 2010 mehr als 1,5% unseres Gesamtumsatzes. Unsere Kunden sind überwiegend
13

kleinere und mittlere Stahlkonsumenten (und einige Großkunden in unserem Stahl Servicecenter Geschäft) aus
verschiedenen Industriezweigen, wie der Bauindustrie, dem Maschinen- und Anlagenbau, dem Handel, der
Produktion von Haushaltsgeräten und Gebrauchsgütern und der Automobilindustrie.
Wir halten ein weit gefächertes Sortiment vor und sind in der Lage, Produkte in flexiblen Bestellgrößen, die
auf die Bedürfnisse unserer Kunden zugeschnitten sind, kurzfristig zu liefern. Dieses rasch verfügbare Sortiment
macht ein One-Stop-Shopping möglich. Zusammen mit der zuverlässigen und pünktlichen Lieferung der Produkte,
die unser geografisch weit verzweigtes Distributions-Netzwerk ermöglicht, hat dies eine hohe Kundenloyalität zur
Folge; die Mehrheit unserer Kunden kauft wiederholt bei uns ein. Mit der Akquisition von Becker Stahl-
Service GmbH (“Becker Stahl”) in 2010 haben wir unser Distributions-Netzwerk um das nach unserer Ansicht
größte an einem Standort befindliche europäische Stahl Service-Center ergänzt, das eine hohe Flexibilität bietet,
auch kurzfristig Lieferungen mit fast allen Spezifikationen anzubieten. Wir haben außerdem unsere Einkaufsposition
für Flachstahl wesentlich verbessert und unsere Kundenbasis weiter diversifiziert, indem wir insbesondere
den Anteil der Bauindustrie reduziert haben. Mit unserer Akquisition von Macsteel werden wir unser in den
Vereinigten Staaten bisher auf Langprodukte und Grobbleche fokussiertes Produktprogramm um ein breites
Sortiment von quer- und längsgeteilten Stahl Servicecenter Flachstahlprodukten erweitern. Wir glauben, dass die
Akquisition insbesondere unsere Strategie unterstützen wird, das Stahl-Servicecenter-Geschäft für Flachstahlprodukte
mit Industriekunden auszubauen.
In der Vergangenheit war es uns grundsätzlich möglich, Änderungen der Marktpreise an unsere große und
diversifizierte Kundenbasis weiterzureichen, der traditionell ständig verfügbare Produkte und eine verlässliche und
pünktliche Lieferung in flexiblen Bestellgrößen besonders wichtig sind. Außerdem passt jeder unserer Distributionsstandorte
seine angebotenen Produkte und Dienstleistungen an die Bedürfnisse und Ansprüche der jeweiligen
lokalen Märkte an. An unseren Distributionsstandorten in der Schweiz bieten wir z.B. eine große Anzahl an
Metallprodukten für relativ kleine Bau- und Ingenieurbetriebe an, während wir in Großbritannien besondere
Stahlteile, sog. Lochstegträger, anbieten, um der besonderen Bauweise in diesem Markt gerecht zu werden.
Zu unseren Lieferanten gehören große Stahl- und Metallhersteller, wie z.B. ArcelorMittal, Corus, Thyssen-
Krupp, Nucor und Alcoa, sowie regionale spezialisierte Stahlproduzenten wie z.B. Riva / Ilva, Celsa, Corrugados
Gallardo und Gerdau Ameristeel. Als unabhängiger Metalldistributeur sind wir in der Lage, unsere Einkaufsstrategie
selbstständig zu optimieren und haben die Möglichkeit, bei einer Vielzahl von Lieferanten einzukaufen.
Darüber hinaus sind wir der Auffassung, dass unsere im Vergleich zu lokalen und regionalen Multimetalldistributeuren
relative Größe uns einen Wettbewerbsvorteil verschafft, weil wir grundsätzlich in der Lage sind, mit
Stahl- und Metallherstellern Mengenrabatte und verbesserte Zahlungsbedingungen zu vereinbaren. Wir glauben,
dass wir ein wichtiger Kunde von Stahl- und Metallherstellern sind, weil diese einen erheblichen Teil ihres
Umsatzes mit uns erzielen. Zugleich sind wir ein wichtiger Teil des Distributionsnetzes von Stahl- und Metallherstellern,
weil wir eine Kundenbasis erreichen, welche die Stahl- und Metallhersteller überwiegend nicht direkt
ansprechen, da diese Kunden nur unregelmäßig kleine Mengen von an den Kundenbedarf angepassten Produkten
bestellen. Auch schätzen unsere Kunden unsere Fähigkeit, Produkte kurzfristig liefern zu können, wohingegen
Stahlhersteller im Regelfall sehr viel längere Lieferzeiten haben. Das gilt auch für Stahl- und Metallhersteller mit
eigenem Distributionsgeschäft, deren Produktionskapazität die Kapazität ihrer eigenen Distributionsnetze und ihrer
Direktverkäufe übersteigt.
Seit unserem Börsengang 2006 hat sich Klöckner & Co grundlegend gewandelt. Die Umsetzung unserer
Initiativen zur Verbesserung unserer Geschäftsaktivitäten führte zu stärkerer zentraler Kontrolle des Geschäfts,
namentlich im Bereich Einkauf, Produktmanagement und IT. Erst kürzlich haben wir Initiativen zur Optimierung
und Harmonisierung von Prozessen innerhalb der Logistik und der Lagerhaltung ergriffen. Unser kurzfristiges und
strenges Management des Net Working Capitals während der Finanzkrise ist unserer Auffassung nach ein Beweis
unserer Prozessoptimierung. Unsere stetigen Akquisitionsaktivitäten hatten ebenfalls eine wesentliche Auswirkung
auf unser Geschäft; in Europa haben sie unsere Marktposition gestärkt und in den Vereinigten Staaten haben wir u.a.
durch die Akquisition von Macsteel unsere Aktivitäten deutlich ausgebaut. Im Jahr 2011 sind wir durch die
Akquisition von Frefer auf den brasilianischen Markt vorgestoßen. Mit den Akquisitionen von Becker Stahl und
Macsteel haben wir auch unsere Stahl Servicecenter Aktivitäten wesentlich ausgebaut; wir sind der Auffassung,
dass dies zu einem ausgewogeneren und stabileren Geschäftsmodell führt. Gleichzeitig waren wir hierdurch in der
Lage, unsere Abhängigkeit von der Bauindustrie zu reduzieren. Wir streben an, diesen Transformationsprozess
durch unsere unten beschriebene Klöckner 2020 Strategie fortzusetzen.
14

Überblick über die Industrie
Als Mittler zwischen den Herstellern und den Käufern von Stahl- und Metallprodukten haben Metalldistributeure
eine Schlüsselposition in diesem Markt. Die Produzenten von Stahl- und Metallprodukten verkaufen ihre
Produkte vornehmlich in großen Mengen und mit langen Lieferzeiten, während unsere Endabnehmer normalerweise
kleine Mengen kaufen und auf den Kunden zugeschnittene Produkte mit kurzen Lieferzeiten benötigen. Im
Jahr 2010 war das durchschnittliche Bestellvolumen unserer Kunden z.B. kleiner als 0,5 Tonnen pro Artikel,
während Stahlhersteller nach unserer Einschätzung typischerweise Mindestmengen von 10 — 25 Tonnen mit
Lieferzeiten von in der Regel 6 — 10 Wochen liefern. Diese Lücke schließen Metalldistributeure, indem sie große
Mengen der Produkte mit langen Lieferzeiten von den Stahlherstellern kaufen und diese dann ihren Kunden in
kleinen, am Kundenbedarf orientierten Mengen mit kurzen Lieferzeiten zur Lieferung vor Ort anbieten. Zugleich
versetzen die Metalldistributeure ihre Kunden in die Lage, selber nur geringe Vorräte vorzuhalten, indem sie die
Verfügbarkeit der Produkte und kurze Lieferzeiten ermöglichen. Einige Hersteller verkaufen auch kleinere Teile
ihrer Produktion über ihre eigenen Vertriebskanäle.
Stahl ist das am meisten genutzte Metall in Europa und Nordamerika. Entsprechend dem Volumen des
Gesamtmarktes haben wir im Jahr 2010 ungefähr 78,1% unseres Umsatzes mit Stahlprodukten erwirtschaftet.
Wettbewerbsstärken
Größter unabhängiger Stahl- und Metalldistributeur im Gesamtmarkt Europa und Nordamerika
Als der größte produzentenunabhängige Stahl- und Metalldistributeur im europäischen und nordamerikanischen
Gesamtmarkt und einer der drei größten lagerhaltenden Multi-Metalldistributeuren in den europäischen
Kernmärkten, in denen wir tätig sind, haben wir nach unserer Einschätzung aufgrund unserer Größe gegenüber
kleineren Wettbewerbern einen Wettbewerbsvorteil. Unser geografisch weit verzweigtes Netzwerk mit 246
Distributionsstandorten zum 31. Dezember 2010 erlaubt es uns, unser breites Angebot an Produkten und
Dienstleistungen schnell und zuverlässig zu liefern. Dies wiederum ermöglicht es unseren Kunden, ihren Metallbedarf
vollständig bei uns zu decken (One-Stop-Shopping). Unsere Kunden schätzen es typischerweise, dass sie
alle benötigten Produkte (flache und lange Stahlprodukte, Aluminium, Rostfrei. etc.) an einem Ort beziehen
können. Während unser zentralisierter Einkauf uns in die Lage versetzt, attraktive Mengenrabatte und günstige
Zahlungsbedingungen von Lieferanten zu erhalten, glauben wir, dass die Größe unseres Distributionsnetzes mit
seinen zentralen, regionalen und speziellen Distributionsstandorten uns gegenüber kleineren Wettbewerbern einen
weiteren Vorteil verschafft, da wir die Lagerung weniger häufig nachgefragter Produkte zentralisieren können. Dies
wiederum senkt den gesamten Vorratsbestand in unseren Lagerhäusern, ohne die Verfügbarkeit der Produkte
einzuschränken. Hinzu kommt, dass nach unserer Einschätzung unsere Unabhängigkeit von Stahlproduzenten zur
Folge hat, dass wir flexibler sind als an Stahlproduzenten gebundene Distributeure, und dass wir besser auf
Angebots- und Nachfrageschwankungen im Markt reagieren können, weil wir unsere Produkte von einer Vielzahl
von Lieferanten beziehen können. Gleichzeitig sind wir ein wichtiger Kunde für viele unserer Lieferanten, zu denen
Stahl- und Metallproduzenten mit eigenem Distributionsgeschäft gehören, deren Produktionskapazität die Gesamtkapazität
ihres Distributionsnetzes und ihrer Direktverkäufe übersteigt.
Diversifiziertes Kundenportfolio in Europa und Nord-Amerika
Wir haben in den 15 Ländern, in denen wir in Europa und Nord-Amerika unser Geschäft betreiben, mehr als
170.000 aktive Kunden, die im Jahr 2010 Produkte von uns gekauft haben. Diese Kunden sind hauptsächlich
kleinere und mittlere Unternehmen, deren durchschnittliches Bestellvolumen rund EUR 1.200 beträgt. Im Jahr
2010 trug kein Einzelkunde zu mehr als 1,5% unseres Gesamtumsatzes bei. Nach unserer Einschätzung sind vor
allem unsere kleineren Kunden in der Regel weniger preissensibel als Großabnehmer der Stahlproduzenten
(obwohl als Folge der Finanzmarktkrise auch die Preissensitivität unserer Kunden gewachsen ist). Unsere Kunden
sind in den verschiedensten Industriezweigen, wie der Bauindustrie, dem Maschinen- und Anlagenbau, dem
Handel, dem Apparate- und dem Gebrauchsgüterbau und der Automobilindustrie, tätig. Durch die Akquisition von
Becker Stahl in 2010 haben wir unsere Kundengruppen (Industrien) diversifiziert und den Anteil der Automobilindustrie
erhöht, während gleichzeitig der Anteil der Bauindustrie, die durch die Finanzkrise besonders getroffen
wurde, reduziert wurde. Die Akquisition von Becker Stahl hat ferner unsere Präsenz bei Stahl-Servicecentern
deutlich verstärkt. Wir glauben, dass die Vielfältigkeit der geografischen Märkte und die relativ große Bandbreite
der Industrien, in denen wir tätig sind, sowie unsere Kundenbasis uns weniger anfällig für regionale und
industriespezifische Abschwünge machen.
15

Flexibles Geschäftsmodell für verschiedene Konjunkturzyklen
Wir kaufen Stahl und andere Metalle in großen Mengen zu Marktpreisen ein. In der Vergangenheit sind wir
grundsätzlich in der Lage gewesen, Preisänderungen an unsere Kunden weiterzugeben, denen wir unseren
Produktbestand in kleineren Einheiten verkaufen und liefern. Unsere große und diversifizierte Kundenbasis legt
neben dem Preis vor allem auf Service und Verfügbarkeit Wert. Da wir nur in begrenztem Umfang langfristige
Einkaufsverpflichtungen haben, können wir unser Einkaufsverhalten und unseren Vorratsbestand besser an eine
veränderte Nachfrage anpassen, wie wir es während der Wirtschaftskrise 2008 und 2009 getan haben. Während
dieser Zeit haben wir zudem unsere operativen Kosten sowie unsere Nettofinanzverbindlichkeiten gesenkt. Unter
anderem haben wir in diesem Zusammenhang unsere Mitarbeiterzahl reduziert. Wir sind der Auffassung, dass diese
Maßnahmen uns eine vorteilhafte Wettbewerbsposition verschafft haben.
In der Vergangenheit ist es uns gelungen, in Zeiten fallender Nachfrage und fallender Stahlpreise erhebliche
Cash-Flows zu generieren und eine starke Liquiditätsposition aufrecht zu erhalten. Fallende Stahlpreise führen zu
Bewertungsverlusten bei unserem Vorratsbestand, aber auch zu einer Reduktion unseres Bedarfs an Working
Capital, was auf niedrigere Wiederbeschaffungskosten für die Vorräte und ein geringeres Volumen der Forderungen
aus Lieferungen und Leistungen zurückzuführen ist. Daraus folgt, dass wir in Zeiten fallender Stahlpreise einen
hohen Cash-Flow generieren und (zumindest für einen beträchtlichen Zeitraum) Liquidität aufbauen. Seit Beginn
des vierten Quartals 2008 bis 31. Dezember 2009, einer Zeit rasant fallender Stahlpreise, haben wir beispielsweise
unser Working Capital um EUR 1,083 Millionen oder 63% auf EUR 637 Millionen reduziert. Dadurch und
aufgrund einer Kapitalerhöhung im September 2009 konnten wir ein Guthaben von EUR 149,6 Millionen zum
31. Dezember 2009 aufbauen. Im Geschäftsjahr 2010 sowie im ersten Quartal 2011 dagegen führten höhere
Stahlpreise und gestiegene Gesamtumsätze zu einem Anstieg des Working Capital; zudem war zusätzliches Kapital
zur Finanzierung unserer Akquisitionen erforderlich. Während ein Teil dieser Mittel aus einem aufgrund der
verbesserten Ergebnislage höheren operativen Cash Flow finanziert werden konnte, führte das dazu, dass unsere
Nettoverschuldung auf EUR 136,9 Millionen zum 31. Dezember 2010 stieg.
Anders als Stahlproduzenten haben wir keine umfangreichen Produktionsanlagen. Unser relativ geringer
Investitionsbedarf für Anlagevermögen (Capex) und unser flexibleres Geschäftsmodell ermöglichen es uns, uns
leichter an ein schwieriges Geschäftsumfeld wie in der Wirtschaftskrise von 2008 bis 2009 anzupassen.
Unsere Kapitalstruktur ist durch eine relativ hohe Eigenkapitalquote von 34,9% der Bilanzsumme (zum
31. März 2011), verschiedene Quellen für Working Capital und andere Fremdfinanzierungen sowie durch das
Fehlen von ergebnisabhängigen Covenants in unserer Senior Revolving Credit Facility und den ABS Programmen
geprägt. Wir glauben, dass unsere komfortable Kapitalbasis unter Berücksichtigung dieses Angebots uns im
Hinblick auf die verbesserte wirtschaftliche Lage in die Lage versetzt, Wachstumschancen durch Akquisitionen
nutzen und einen gesteigerten Working-Capital-Bedarf finanzieren zu können.
Erfahrenes und pro-aktives Management mit erfolgreicher Bilanz
Wir sind der Auffassung, dass wir ein engagiertes, ambitioniertes, loyales und kompetentes Management mit
erheblicher Erfahrung in der Multi-Metalldistribution und anderen einschlägigen Industrien haben. In den Jahren
des Wachstums hat unser Management seine Fähigkeit, eine disziplinierte Akquisitionsstrategie zu verfolgen,
bewiesen und hat seit 2006 mehrere neue Unternehmen akquiriert und integriert. Seit unserem Börsengang in 2006
hat unser Management auch seine Leistungsfähigkeit unter Beweis gestellt, indem es erfolgreich verschiedene
Restrukturierungsprogramme implementiert hat, die zu erheblichen Kosteneinsparungen geführt und das Bestandsmanagement
und die Einkaufsstrategie optimiert haben. So hat unser Management beispielsweise das kanadische
Geschäft Namasco im Mai 2008 verkauft (Vollzug der Transaktion im Juli 2008) und hat auch schnell auf das
schwierige Wirtschaftsumfeld reagiert, indem es im Oktober 2008 (mit einer Erweiterung im März 2009) ein
sofortiges Aktionsprogramm mit dem Ziel eingeführt hat, die Betriebskosten und die Nettoverschuldung zu senken
und flexible Finanzierungsquellen und liquide Mittel zu sichern. Außerdem haben wir unsere Senior Revolving
Credit Facility und unser europäisches ABS-Programm erfolgreich umstrukturiert, die nunmehr keine ergebnisabhängigen
Covenants mehr enthalten. Schließlich haben wir im Jahr 2009 unter schwierigen Marktbedingungen
eine Kapitalerhöhung durchgeführt und 2010 eine weitere lang laufende Wandelschuldverschreibung begeben.
Gut aufgestellt für künftiges Wachstum
Wir sind der Auffassung, dass Klöckner & Co für künftiges Wachstum in unseren existierenden und in
zukünftigen neuen Märkten gut aufgestellt ist. Wir denken, dass wir in unseren existierenden Märkten, insbesondere
in Westeuropa und den Vereinigten Staaten, in den nächsten Jahren bedeutende potentielle Wachstumsgelegenheiten
haben werden. Nachdem sich die Stahlmärkte in diesen zwei Regionen erholen, erwarten wir,
dass diese Märkte Wachstumsraten zeigen werden, die über den allgemeinen Wachstumsraten für das jeweilige
16

Bruttoinlandsprodukt (BIP) liegen. Wir haben durch unsere Restrukturierung während der Wirtschaftskrise in 2009
eine niedrigere Kostenbasis und schlankere Strukturen eingeführt, was unsere Wettbewerbsposition zusammen mit
der als Folge unserer Kapitalmarktaktivitäten starken Bilanz unserer Ansicht nach verbessert hat. Wir glauben, dass
diese Aufstellung uns im Vergleich zu unseren kleineren und weniger gut kapitalisierten Wettbewerbern in eine gute
Position versetzt, um Wachstumsgelegenheiten nutzen zu können. Nach unserer Einschätzung belegen unsere
jüngsten erfolgreichen Akquisitionen, wie etwa die Akquisition von Becker Stahl in 2010 mit seinem Fokus auf
profitable und stabile Stahl-Servicecenter-Aktivitäten, die Möglichkeiten, unter den gegenwärtigen Rahmenbedingungen
schnell und mit Mehrwert extern zu wachsen. Die Akquisition von Macsteel in 2011 in den Vereinigten
Staaten war ein weiterer Schritt im Rahmen unserer Akquisitionsstrategie und belegt unsere Fähigkeit, Marktgelegenheiten
auszunutzen; wir erwarten hierdurch, unsere Position in den Vereinigten Staaten durch eine
erweiterte Produktpalette und einen höheren Serviceanteil weiter zu verstärken. Außer in unseren existierenden
Märkten sehen wir bedeutende Wachstumsgelegenheiten in den Schwellenländern. Durch unsere kürzliche
Akquisition von Frefer, einem Stahldistributeur in Brasilien, haben wir einen ersten Schritt in diesen Bereich
gemacht. Wir denken, dass wir mit diesen Initiativen gut aufgestellt sind, um unser Ziel zu erreichen, Klöckner &
Co zum ersten weltweiten Multi-Metalldistributeur zu entwickeln.
Strategie
Im Oktober 2010 haben wir unsere neue langfristige Wachstumsstrategie Klöckner & Co 2020 vorgestellt. Die
Verwerfungen der Finanzkrise und die damit verbundenen veränderten Rahmenbedingungen machten eine
Anpassung unserer Strategie erforderlich, die seit dem Börsengang 2006 weitgehend unverändert umgesetzt
wurde. Die Veränderung der Rahmenbedingungen hat insbesondere zur Folge gehabt, dass der Stahlverbrauch in
den Industrienationen nach dem drastischen Einbruch im Jahr 2009 noch Jahre unter dem Vorkrisenniveau liegen
wird, während auf der anderen Seite die Schwellenländer ihren Wachstumstrend weitgehend ungebremst fortsetzen.
Vor diesem Hintergrund haben wir unsere Strategie neu definiert und weiteres Optimierungspotenzial
ermittelt. Die Strategie basiert auf den vier Säulen externes Wachstum, organisches Wachstum, Geschäftsoptimierung
und Personal & Managemententwicklung, die die Perspektiven und Leitlinien für die nächsten zehn
Jahre aufzeigen. Wir wollen Klöckner & Co zum ersten tatsächlich globalen Multi-Metaldistributeur entwickeln.
Als Wachstumsziele streben wir vorbehaltlich insbesondere der Identifizierung und dem Abschluss geeigneter
Akquisitionen die Verdoppelung des Absatzes in fünf Jahren und eine Verdrei- bis Vervierfachung bis zum Jahr
2020 an.
Externes Wachstum: In unserem wachstumsschwächeren europäischen Kernmarkt legen wir den Fokus auf
die Akquisition von Unternehmen mit margenstärkeren Produkten, Dienstleistungen und Kundensegmenten unter
Reduzierung unserer Abhängigkeit von der Bauindustrie. In Nordamerika wollen wir unseren Marktanteil auch
durch größere Zukäufe deutlich ausbauen. Die kürzliche Akquisition von Macsteel ist ein wichtiger Schritt in diese
Richtung. Langfristig wollen wir unser hohes Wachstumstempo durch den Markteintritt in Schwellenländer
sichern, da wir glauben, dass der Stahlverbrauch sich in diesen Ländern dynamischer als in etablierten Ländern
entwickeln wird. Wir glauben, dass eine größere Ausgewogenheit unserer geografischen Präsenz uns auch weniger
anfällig für verschiedene Wirtschaftszyklen macht und zusätzliches Wachstumspotential schaffen wird. Wir planen,
uns insofern auf Brasilien und China mit verschiedenen Ansätzen zu konzentrieren. Den brasilianischen Markt
haben wir mit unserer Akquisition der Frefer-Gruppe im Mai 2011 betreten und könnten hier weitere Akquisitionen
unabhängiger Stahldistributeure verfolgen. Den chinesischem Markt werden wir mit einem ersten eigenen
mittelgroßen Service Center für uns erschließen, um lokale Niederlassungen internationaler Konzerne zu beliefern;
hierzu haben wir kürzlich die entsprechenden Anlagen angemietet. Von den Konkurrenten in China wollen wir uns
durch hohe Qualität, Just-in-time-Lieferung, zusätzliche Dienstleistungen sowie unsere Zuverlässigkeit und unsere
Zahlungsbedingungen abheben.
Organisches Wachstum: Die Rahmenbedingungen unserer Kernmärkte Europa und Nordamerika haben sich
deutlich verändert. Während wir vorher in einen wachsenden Markt verkauft haben, befinden wir uns nun in einem
starken Wettbewerb um eine kleinere Marktgröße. Daher beabsichtigen wir, den Fokus auf den Kunden deutlich zu
steigern, um mit maßgeschneiderten Angeboten von Produkten und Dienstleistungen Marktanteile auszubauen.
Gleichzeitig wollen wir unsere Kunden noch stärker an uns binden und den Kundennutzen erhöhen; dazu werden
wir stärker als bisher aktiv auf unsere Kunden zugehen und den Vorteil unseres internationalen Netzwerks besser
vermarkten. Zusätzlich werden wir unser Produktportfolio durch höhermargige Produkte (mit Schwerpunkt auf
Blechen, Grobblechen, Hohlprofilen, Röhren und Aluminium) erweitern und die angebotenen Anarbeitungsleistungen
steigern. Wir glauben, dass diese Maßnahmen unser Geschäftsmodell weniger anfällig für schwankende
Stahlpreise machen werden und zugleich sollte eine Integration entlang der Wertschöpfungskette einen positiven
Effekt auf unsere Marge haben.
17

Geschäftsoptimierung: Wir glauben, dass für einen global aufgestellten Distributeur wie Klöckner & Co
optimierte und aufeinander abgestimmte Prozesse ein entscheidender Erfolgsfaktor und ein wichtiges Differenzierungsmerkmal
gegenüber der Konkurrenz sind. Die Optimierung des Einkaufs, des Logistiknetzwerkes sowie
der IT werden wir daher mit hoher Priorität weiter vorantreiben. Wir haben eine neue Abteilung ,,Operations
Europe“ etabliert, um unsere verschiedenen Geschäftsaktivitäten zu koordinieren und die Harmonisierung zu
überwachen. Durch weitere Verbesserung unserer Zuverlässigkeit und Qualität gepaart mit erhöhter Effizienz
werden wir es weiterhin anstreben, durch Best-in-Class Lösungen Wettbewerb zu betreiben und kontinuierlich
unsere Wettbewerbsfähigkeit auszubauen.
Personal & Managemententwicklung: Zur erfolgreichen Umsetzung unserer Wachstumsambitionen als
Dienstleistungsunternehmen ist die Entwicklung von Mitarbeitern und Führungskräften eine zentrale Voraussetzung.
Gut ausgebildete und motivierte Mitarbeiter sind entscheidend für unseren Erfolg. Deshalb entwickeln wir
derzeit verbesserte Programme mit dem Ziel, die Schulung und Weiterbildung unserer Mitarbeiter und Führungskräfte
deutlich zu erweitern und unsere Attraktivität als Arbeitgeber zu erhöhen.
Verwendung des Emissionserlöses
Der Nettoemissionserlös aus dem Angebot unter Abzug der Bankenprovision und anderer Emissionskosten
wird sich auf ungefähr EUR 514,5 Millionen belaufen. Wir beabsichtigen mit dem Nettoemissionserlös zusammen
mit vorhandenen Barmitteln und dem Cash-Flow aus unserer Geschäftstätigkeit, in erster Linie weiterhin
Akquisitionsgelegenheiten wahrzunehmen und diese Mittel im Übrigen für allgemeine Unternehmenszwecke
zu verwenden. Wir erwarten, dass Akquisitionen den Erwerb von weiteren Metalldistributeuren und Stahl-Servicecentern
einschließen werden mit dem Ziel, unsere Kundenbasis und unsere regionalen Produktportfolien in
bestehenden und neuen Märkten zu erweitern. Im Einklang mit unserer Strategie können solche Akquisitionen
bedeutend sein. Mit dem Emissionserlös wollen wir unsere Nettoverschuldung und unsere Eigenkapitalquote in
einem vernünftigen Rahmen halten.
18

Ausgewählte konsolidierte Finanz- und andere Geschäftsdaten
Die folgenden Tabellen fassen ausgewählte historische konsolidierte Finanzinformationen der Klöckner & Co
SE zum und für die Jahre, die am 31. Dezember 2008, 2009 und 2010 endeten, und die Drei-Monats-Perioden, die
am 31. März 2010 und 2011 endeten, jeweils nach IFRS wie sie in der EU anzuwenden sind, zusammen. Die
Zusammenfassung der historischen konsolidierten Finanzinformationen für die Geschäftsjahre zum 31. Dezember
2008, 2009 und 2010 stammen aus den geprüften Konzernabschlüssen der Klöckner & Co SE für diese Zeiträume,
die von KPMG Hartkopf + Rentrop Treuhand KG Wirtschaftsprüfungsgesellschaft, Köln (für die Geschäftsjahre
zum 31. Dezember 2008 und 2009) sowie KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin (für das Geschäftsjahr
zum 31. Dezember 2010) geprüft worden sind. Die Zusammenfassung der historischen konsolidierten
Finanzinformationen für die Drei-Monats-Perioden zum 31. März 2010 und 2011 stammen aus den ungeprüften
Konzernzwischenabschlüssen der Klöckner & Co SE für diese Zeiträume. Im Konzernabschluss für das Geschäftsjahr
2009 wurden bestimmte Vergleichszahlen für das Geschäftsjahr 2008 geändert und weichen von den Beträgen,
die in dem entsprechenden historischen Konzernabschluss enthalten sind, aufgrund der erstmaligen Anwendung
von IFRIC 14 ab. IFRIC 14 gibt generelle Leitlinien zur Bestimmung der Obergrenze des Überschussbetrages eines
Pensionsplans, der nach IAS 19 aktiviert werden kann. Die in den nachstehenden Tabellen angegebenen Daten aus
der Konzerngewinn- und Verlustrechnung sowie der Bilanz zum 31. Dezember 2008 und 2009 enthalten derart
angepasste Zahlen.
Geschäftsjahre zum 31. Dezember
Drei Monate zum
31. März
2008 2009 2010 2010 2011
(ungeprüft) (ungeprüft)
(EUR in tausend)
Ausgewählte Informationen aus der
Konzern-Gewinn- und Verlustrechnung
Umsatzerlöse. ........................ 6.749.595 3.860.493 5.198.181 1.048.841 1.586.799
Sonstige betriebliche Erträge.............. 371.182 127.359 35.822 8.028 8.475
Bestandsveränderungen (1) ................ 10.832 (8.661) (7.383) (698) 7.342
Aktivierte Eigenleistungen ............... 73 10 39 5 —
Materialaufwand. ...................... (5.394.417) (3.206.830) (4.054.830) (812.538) (1.241.008)
Personalaufwand ...................... (546.017) (441.184) (486.618) (111.180) (131.520)
Abschreibungen ....................... (67.372) (109.638) (85.783) (18.393) (18.653)
davon Verluste aus Wertminderung ....... — (41.782) — — —
Sonstige betriebliche Aufwendungen . . ...... (590.612) (399.684) (447.442) (103.372) (125.589)
Betriebsergebnis ...................... 533.264 (178.135) 151.986 10.693 85.846
Beteiligungsergebnis. ................... — 2 5 — —
Finanzergebnis ....................... (69.782) (61.699) (67.650) (15.156) (19.350)
Ergebnis vor Steuern .................. 463.482 (239.832) 84.341 (4.463) 66.496
Steuern vom Einkommen und vom Ertrag ....
Auf Minderheitsgesellschafter entfallendes
(79.308) 54.168 (4.129) 6.194 (22.350)
Konzernergebnis .....................
Auf Aktionäre der Klöckner & Co SE
(14.161) 2.820 2.671 565 684
entfallendes Konzernergebnis ........... 398.335 (188.484) 77.541 1.166 43.462
Konzernergebnis ...................... 384.174 (185.664) 80.212 1.731 44.146
19

Geschäftsjahre zum 31. Dezember
Drei Monate zum
31. März
2008 2009 2010 2010 2011
(ungeprüft) (ungeprüft)
(EUR in tausend)
Ausgewählte Informationen aus der
Konzernbilanz
Langfristige Vermögenswerte ............
Davon
811.727 711.916 855.961 859.633 806.859
Immaterielle Vermögenswerte ........... 235.931 194.985 227.323 244.053 210.797
Sachanlagen ........................ 479.421 426.151 524.169 506.279 507.376
Kurzfristige Vermögenswerte ............
Davon
2.272.041 2.000.846 2.635.134 2.181.046 2.973.352
Vorräte ............................
Forderungen aus Lieferungen und
1.000.612 570.918 898.841 798.354 1.043.235
Leistungen ....................... 798.618 464.266 703.101 689.512 924.641
Liquide Mittel (2) ..................... 296.636 826.517 934.955 614.559 927.931
Summe Aktiva .......................
Eigenkapital (inklusive
3.083.768 2.712.762 3.491.095 3.040.679 3.780.211
Minderheitsanteile) .................. 1.081.352 1.123.263 1.290.494 1.137.412 1.318.158
Summe langfristiger Schulden ...........
Davon
Rückstellungen für Pensionen und ähnliche
1.176.576 926.758 1.361.392 1.001.346 1.406.748
Verpflichtungen ....................
Sonstige Rückstellungen (inklusive latenter
180.095 174.598 174.442 177.143 173.486
Steuerverbindlichkeiten) ............. 123.797 102.316 111.423 103.538 101.459
Finanzverbindlichkeiten. ............... 813.000 618.744 1.020.582 668.448 1.097.112
Summe kurzfristiger Schulden ...........
Davon
825.840 662.741 839.209 901.921 1.055.305
Sonstige Rückstellungen ............... 284.766 109.868 107.259 107.588 101.928
Finanzverbindlichkeiten. ............... 48.112 52.169 39.578 90.776 45.935
Übrige Verbindlichkeiten ...............
Verbindlichkeiten aus Lieferungen und
81.640 51.650 76.120 60.347 78.951
Leistungen ....................... 392.183 398.387 584.614 620.038 804.704
Summe Passiva .......................
Ausgewählte Informationen aus der
Konzernkapitalflussrechnung
3.083.768 2.712.762 3.491.095 3.040.679 3.780.211
Cash-Flow aus betrieblicher Tätigkeit . ...... 186.884 564.662 35.188 (60.366) (69.370)
Cash-Flow aus der Investitionstätigkeit ...... 72.090 (8.032) (187.748) (127.313) (5.318)
Cash-Flow aus der Finanzierungstätigkeit ....
Zahlungswirksame Veränderungen des
(123.439) (23.848) 251.974 (26.196) 70.616
Finanzmittelbestands ................
Andere ausgewählte Finanzinformationen
und Geschäftsinformationen (ungeprüft)
135.535 532.782 99.414 (213.875) (4.072)
Gelieferte Tonnen (in tausend Tonnen) ...... 5.974 4.119 5.314 1.180 1.498
Rohertrag (3) .......................... 1.366.083 645.012 1.136.007 235.610 353.133
EBITDA
(4) (5)
........................ 600.636 (68.495) 237.774 29.086 104.499
EBITDA, bereinigt (6) ................... 406.491 — — — —
Unverwässertes Ergebnis je Aktie (IFRS) in
EUR.............................. 8,56 (3,61) 1,17 0,02 0,65
Auszahlungen für Anlagevermögen
(Capex) (7) .......................... 48.111 25.023 26.976 3.966 6.011
Summe Finanzverbindlichkeiten ........... 861.112 670.913 1.060.160 759.224 1.143.047
Finanzierungskosten .................... 6.312 5.977 11.669 5.263 12.186
Summe Fremdkapital (8) .................. 867.424 676.890 1.071.829 764.487 1.155.233
Nettoverschuldung (9) .................... 570.788 (149.627) 136.874 149.928 227.302
20

(1) Die Bestandsveränderungen ergeben sich aus der um Währungseffekte bereinigten Differenz zwischen fertigen und unfertigen Erzeugnissen
am Periodenende verglichen mit dem Periodenanfang. Der größte Teil unserer Vorräte besteht aus Handelsware. Veränderungen des
Handelsgüterbestands sind in den Bestandsveränderungen nicht enthalten, sondern im Materialaufwand abgebildet.
(2) Liquide Mittel beinhalten Zahlungsmittel und Zahlungsmitteläquivalente, kurzfristig veräußerbare Wertpapiere und, für das Geschäftsjahr
zum 31. Dezember 2008, EUR 3,105 Millionen in verfügungsbeschränkten Einlagen.
(3) Der Rohertrag ist der Umsatz zzgl. Bestandsveränderungen und anderer aktivierter Eigenleistungen abzüglich des Materialaufwands.
(4) Das EBITDA ergibt sich aus dem Konzernergebnis zzgl. Finanzergebnis, Einkommensteuern und Abschreibungen und Firmenwertabschreibungen
(Impairments) für den jeweiligen Zeitraum. Das EBITDA ist nach IFRS nicht als Kennzahl anerkannt und ersetzt nicht die
Kennzahlen aus der Gewinn- und Verlustrechnung oder der Kapitalflussrechnung, die in Übereinstimmung mit IFRS ermittelt werden. Wir
stellen das EBITDA hier nicht als Kennzahl für unser Betriebsergebnis dar. Unser Management ist der Ansicht, dass die Darstellung des
EBITDA für Investoren als Kennzahl für unsere Fähigkeit, Cash zu generieren und unsere Schulden zu bedienen, hilfreich ist. Anleger
sollten das EBITDA aber nicht als Alternative zum nach IFRS ermittelten Konzernergebnis oder als Alternative zu Cash Flows aus
betrieblicher Tätigkeit, aus Investitionstätigkeit oder aus Finanzierungstätigkeit betrachten. Vor allem ist zu beachten, dass eine Steigerung
des EBITDA mit einer Steigerung des Working-Capital-Bedarfs einhergehen kann, während ein rückläufiges EBITDA mit einer Freisetzung
von Working Capital einhergehen kann. Es gibt keine einheitliche Definition von EBITDA, so dass das von anderen Gesellschaften
ausgewiesene EBITDA nicht unbedingt mit dem EBITDA der Klöckner & Co Gruppe vergleichbar sein muss.
(5) Die folgende Berechnung verdeutlicht den Rechenweg vom Konzernergebnis zum EBITDA:
Geschäftsjahre zum 31. Dezember
Drei Monate zum
31. März
2008 2009 2010 2010 2011
(ungeprüft)
(EUR in tausend)
(ungeprüft)
Konzernergebnis . ................................... 384.174 (185.664) 80.212 1.731 44.146
Steuern vom Einkommen und vom Ertrag . . . ............... 79.308 (54.168) 4.129 (6.194) 22.350
Finanzergebnis ................................... 69.782 61.699 67.650 15.156 19.350
Abschreibungen ................................... 67.372 109.638 85.783 18.393 18.653
EBITDA ......................................... 600.636 (68.495) 237.774 29.086 104.499
(6) Das bereinigte EBITDA für das Geschäftsjahr zum 31. Dezember 2008 lässt Gewinne in Höhe von ungefähr EUR 273,4 Millionen aus
Veräußerungen im Jahr 2008 außer Betracht und rechnet den Nettoeffekt von EUR 79,3 Millionen, die im Zusammenhang mit einer
französischen Kartellstrafe stehen, wieder hinzu.
(7) Die Auszahlungen für Anlagevermögen (Capex) entsprechen den Ausgaben für immaterielle Vermögenswerte, Grundstücke, Anlagen und
Maschinen.
(8) Summe des Fremdkapitals vor Abzug der Finanzierungskosten.
(9) Die Nettoverschuldung ergibt sich aus kurzfristigen und langfristigen Finanzverbindlichkeiten vor Abzug der Finanzierungskosten und
abzüglich liquider Mittel.
21

Zusammenfassung der Risikofaktoren
Die Klöckner & Co Gruppe unterliegt einer Reihe von Risiken, die ihre Geschäftstätigkeit, Finanzlage und
Ertragslage negativ beeinflussen können. Nachfolgend werden diese Risikofaktoren zusammengefasst.
Risiken betreffend die Geschäftstätigkeit
Aufgrund der Abhängigkeit unserer Industrie von den weltwirtschaftlichen Rahmenbedingungen hat die
jüngste weltweite Wirtschaftskrise unser Geschäft, unsere Ertragslage und unsere Finanzsituation wesentlich
und nachteilig beeinträchtigt; die weitere Erholung der Konjunktur wird für unser Geschäft wichtig sein.
Unsere Vermögens-, Finanz- und Ertragslage hängt zu einem ganz wesentlichen Teil von den Preisen für
Metalle ab. Diese Preise sind von Natur aus volatil. Kurzfristige Preisschwankungen könnten unsere
Profitabilität und unseren Cash-Flow wesentlich und nachteilig beeinträchtigen.
Wenn wir unser Working Capital nicht erfolgreich managen, könnte dies unsere Profitabilität und Liquidität
wesentlich und nachteilig beeinträchtigen.
Die Branchen unserer Kunden sind zyklisch und teilweise erheblich von der wirtschaftlichen Entwicklung
abhängig, zu der auch die Wirtschaftskrise zählt. Abschwünge in diesen Branchen schmälern unseren
Umsatz und unsere Profitabilität.
In unserem Geschäft herrscht großer Wettbewerb. Ein verstärkter Wettbewerb sowie eine weitere Konsolidierung
könnten einen negativen Einfluss auf unseren Umsatz und unsere Profitabilität haben.
Die globale Wirtschaftskrise hat sich negativ auf unsere Kunden ausgewirkt und führte zu Insolvenzrisiken,
was sich wiederum wesentlich und nachteilig auf unsere Vermögens-, Finanz- und Ertragslage ausgewirkt
hat.
Unsere Vermögens-, Finanz- und Ertragslage könnte wesentlich und negativ beeinflusst werden, falls wir es
nicht schaffen, unsere Betriebskosten zu kontrollieren.
Wechselkurs- und Zinsschwankungen können sich erheblich auf unsere Vermögens-, Finanz- und Ertragslage
auswirken.
Unsere Akquisitionsstrategie birgt Risiken; möglicherweise können wir keine weiteren Akquisitionsziele
ausfindig machen oder geplante Akquisitionen nicht finanzieren oder zukünftige oder jüngere Akquisitionen
nicht erfolgreich durchführen oder integrieren; Akquisitionen können sich als Fehlschlag erweisen. Dies
könnte sich negativ auf unser Wachstum und unsere Profitabilität auswirken.
Im Zusammenhang mit unseren Akquisitionen haben wir signifikante immaterielle Wirtschaftsgüter
aktiviert, die Abschreibungen und Impairment Tests unterliegen.
Unsere Wettbewerbsposition hängt von unserem Management ab. Ein Verlust wichtiger Mitglieder unseres
Managements könnte einen wesentlichen negativen Effekt auf unser Geschäft haben.
Wir sind Risiken und Unsicherheiten in den Ländern, in denen wir unser Geschäft betreiben, und in neuen
Märkten, in die wir expandieren, ausgesetzt.
Die Lieferzeiten und die Kosten unserer Produkte könnten sich erhöhen, falls wir einen wichtigen
Lieferanten verlieren sollten.
Ein Ausfall der EDV-Infrastruktur oder Verzögerungen bei deren weiteren Ausbau könnten sich nachteilig
auf unsere Geschäftstätigkeit auswirken.
Ermittlungen von Wettbewerbsbehörden und Schadensersatzansprüche von Dritten wegen Wettbewerbsverstößen
könnten einen negativen Einfluss auf unsere Vermögens-, Finanz- und Ertragslage haben.
Streiks oder sonstige Arbeitskampfmaßnahmen bei der Klöckner & Co Gruppe, in der Stahl- und Metallbranche
oder bei unseren Kunden könnten unsere Geschäftstätigkeit beeinträchtigen.
Uns könnten erhebliche Kosten im Zusammenhang mit der Einhaltung oder mit dem Umgang mit
Verletzungen von umweltrechtlichen Vorschriften (oder daraus erwachsenden Verbindlichkeiten) sowohl
in Europa als auch in Nordamerika entstehen, was einen wesentlichen Anstieg unserer Betriebsausgaben und
eine Beeinträchtigung unserer Vermögens-, Finanz- und Ertragslage zur Folge haben könnte.
Wir haben erhebliche Pensionsverpflichtungen, deren tatsächliche Höhe die aktuellen Schätzungen überschreiten
könnte.
22

Sollten im Zusammenhang mit konzerninternen Umstrukturierungen und Finanzierungen entstandene
Kosten steuerlich nicht anerkannt werden oder Finanz- oder Sozialversicherungsbehörden aus sonstigen
Gründen Nachforderungen geltend machen, könnte dies nachteilige Auswirkungen auf die Vermögens-,
Finanz- und Ertragslage der Klöckner & Co Gruppe haben.
Unsere Versicherungen bieten nur eingeschränkten Schutz, einige Geschäftsrisiken sind möglicherweise
nicht versichert.
Wir können erheblichen Produkthaftungs- oder Gewährleistungsansprüchen ausgesetzt sein, die sich nicht
nur negativ auf unsere Vermögens-, Finanz- und Ertragslage, sondern auch auf unser Image auswirken
können.
Falls wir unsere Verpflichtungen unter Kreditverträgen nicht einhalten, können unsere Kreditgeber
sämtliche Beträge, die wir ihnen schulden, fällig stellen, was zu Liquiditätsproblemen führen könnte.
Die Aufnahme erheblicher Fremdmittel könnte unsere finanzielle und unternehmerische Flexibilität
einschränken.
Unsere Fähigkeit, genügend Barmittel zur Bedienung unserer Verbindlichkeiten zu generieren, hängt von
zahlreichen Faktoren ab, die außerhalb unserer Kontrolle liegen.
Fehlende Verfügbarkeit von Kapital oder höhere Kapitalkosten in einem schwierigen gegenwärtigen
Kreditumfeld könnten einen wesentlichen negativen Einfluss auf unsere Vermögens-, Finanz- und Ertragslage
haben.
Die Volatilität im Commercial-Paper-Markt und die Solvenz bestimmter Finanzinstitute könnten sich
nachteilig auf unsere Kapitalkosten oder unsere Möglichkeit, Barmittel im Rahmen unserer
ABS-Programme zu generieren, auswirken.
Wir haben in unseren Finanzierungsverträgen Zusicherungen abgegeben, die unsere unternehmerische
Flexibilität einschränken können.
Die Klöckner & Co SE ist eine Holding-Gesellschaft und abhängig von Ausschüttungen ihrer Tochtergesellschaften,
was ihre eigene Fähigkeit, Dividenden auszuschütten, beeinträchtigen kann.
Risiken betreffend das Angebot
Die Kapitalmärkte und der Preis unserer Aktien unterlagen in der Vergangenheit erheblichen Schwankungen
und könnten weiterhin erheblichen Schwankungen unterliegen.
Die Beteiligungen von Aktionären, die nicht an dem Angebot teilnehmen, werden verwässert.
Falls das Angebot nicht durchgeführt wird oder falls unser Aktienpreis erheblich sinkt, könnten die
Bezugsrechte wertlos werden.
Es ist nicht sicher, dass ein aktiver Handel mit den Bezugsrechten entstehen wird. Falls sich ein Handel
entwickelt, könnten die Bezugsrechte höheren Preisschwankungen unterliegen als die Aktien.
Falls Aktionäre Aktien der Gesellschaft in großer Anzahl verkaufen, könnte dies einen erheblichen
Preisdruck auf unsere Aktien zur Folge haben.
Zusammenfassung des Angebots
Bezugsangebot ................... DerVorstand der Gesellschaft hat am 26. Mai 2011 mit Zustimmung
des Aufsichtsrats vom 26. Mai 2011 beschlossen, das Grundkapital
von EUR 166.250.000 um EUR 83.125.000 auf EUR 249.375.000
unter Ausnutzung der Ermächtigung in § 4 Abs. 5a der Satzung durch
die Ausgabe von 33.250.000 auf den Namen lautenden Stückaktien
ohne Nennbetrag (die “Neuen Aktien”) zu erhöhen. Die Neuen Aktien
sind ab dem 1. Januar 2011 gewinnanteilsberechtigt.
Die Neuen Aktien werden von den Konsortialbanken mit der Verpflichtung
gemäß § 186 Abs. 5 Satz 1 Aktiengesetz übernommen, sie
unseren Aktionären zum Bezug anzubieten. 2 Bezugsrechte berechtigen
zum Bezug von 1 Neuen Aktie.
23

Die Eintragung der Durchführung der Kapitalerhöhung im Handelsregister
des Amtsgericht Duisburg ist für den 8. Juni 2011 vorgesehen.
Ausübung des Bezugsrechts ......... DieAktionäre werden durch Veröffentlichung des Bezugsangebots
voraussichtlich am 26. Mai 2011 dazu aufgefordert, ihr Bezugsrecht
zur Vermeidung des Ausschlusses von der Ausübung ihres Bezugsrechts
in der Zeit vom 27. Mai 2011 bis einschließlich 9. Juni 2011
auszuüben.
Das Bezugsverhältnis beträgt 2:1, d.h. je 2 alte Aktien berechtigen
zum Bezug von 1 Neuen Aktie zum Bezugspreis.
Bezugspreis ..................... Der Bezugspreis beträgt EUR 15,85 pro Neuer Aktie und ist bis
spätestens 9. Juni 2011 zu leisten.
Bezugsrechtshandel ............... Die Bezugsrechte (ISIN DE000A1KRDK2) für die Neuen Aktien
werden in der Zeit vom 27. Mai 2011 bis einschließlich 7. Juni 2011
im regulierten Markt (XETRA Frankfurt Specialist) an der Frankfurter
Wertpapierbörse gehandelt. Vom 27. Mai 2011 an werden die bereits
ausgegebenen Aktien der Gesellschaft an der Frankfurter Wertpapierbörse
,,ex Bezugsrecht“ notiert. Die Deutsche Bank Aktiengesellschaft
kann geeignete Maßnahmen ergreifen, um für einen fairen und
geordneten Bezugsrechtshandel Liquidität zur Verfügung zu stellen.
Marktschutzvereinbarung .......... Indemam26.Mai2011 geschlossenen Übernahmevertrag haben wir
uns den Konsortialbanken gegenüber verpflichtet, im Rahmen des
rechtlich Zulässigen ohne Zustimmung der Joint Global Coordinators,
die nicht unbillig verweigert oder verzögert werden darf, für die Zeit
von sechs Monaten gerechnet ab der Notierungsaufnahme der Neuen
Aktien keine Aktien, Optionen auf Aktien oder Wertpapiere, die in
Aktien gewandelt oder getauscht werden können oder mit Rechten
zum Erwerb von Aktien ausgestattet sind, direkt oder indirekt auszugeben,
zu verkaufen, anzubieten, uns zu ihrem Verkauf zu verpflichten,
anderweitig zu übertragen oder zu veräußern und,
abgesehen von bestimmten Ausnahmen, keine Kapitalerhöhung aus
genehmigtem Kapital anzukündigen oder einzuleiten und keine sonstigen
Geschäfte abzuschließen, deren wirtschaftlicher Effekt den
oben beschriebenen Maßnahmen gleich kommt.
Börsenzulassung ................. Sämtliche auf den Namen lautende Stückaktien der Gesellschaft sind
zum Handel am regulierten Markt der Frankfurter Wertpapierbörse
und zum Teilbereich des regulierten Marktes mit weiteren Zulassungsfolgepflichten
(Prime Standard) an der Frankfurter Wertpapierbörse
zugelassen.
Die Zulassung der Neuen Aktien zum regulierten Markt der Frankfurter
Wertpapierbörse und die gleichzeitige Zulassung zum Teilbereich
des regulierten Marktes mit weiteren Zulassungsfolgepflichten
(Prime Standard) an der Frankfurter Wertpapierbörse wird für den
9. Juni 2011 erwartet. Es ist vorgesehen, dass die Neuen Aktien
voraussichtlich am 10. Juni 2011 in die bestehende Notierung für
die Aktien der Klöckner & Co SE einbezogen werden.
Lieferbarkeit .................... DieNeuen Aktien werden in einer Globalurkunde verbrieft, die bei der
Clearstream Banking AG, Mergenthalerallee 61, 65760 Eschborn,
Deutschland, hinterlegt wird. Die Bezieher bzw. Erwerber erhalten
über ihre Neuen Aktien eine Gutschrift auf ihrem Girosammeldepotkonto.
Ein Anspruch der Aktionäre auf Einzelverbriefung ihrer Aktien
besteht insoweit nicht.
24

ISIN, WKN, Common Code,
Handelssymbol für die Neuen Aktien. . International Securities Identification Number (ISIN): DE000KC01000
Wertpapier-Kenn-Nummer (WKN): KC0100
Common Code: 025808576
Handelssymbol: KCO
ISIN, WKN für die Bezugsrechte .... ISIN DE000A1KRDK2 / WKN A1K RDK
Zusammenfassung allgemeiner Informationen zur Gesellschaft
Sitz und Geschäftsjahr der
Gesellschaft ..................... DieGesellschaft hat ihren Sitz in Duisburg und ist unter HRB 20486
im Handelsregister beim Amtsgericht Duisburg eingetragen. Ihr
Hauptgeschäftssitz ist Am Silberpalais 1, 47057 Duisburg,
Abschlussprüfer: .................
Deutschland, Tel. +49-203-307-0.
Das Geschäftsjahr der Gesellschaft ist das Kalenderjahr.
KPMGAGWirtschaftsprüfungsgesellschaft, Berlin.
Zusammenfassung des Grundkapitals und des Managements der Gesellschaft
Ausgegebenes Grundkapital ........ DasimHandelsregister am Tage der Veröffentlichung dieses Prospektes
eingetragene Grundkapital beträgt EUR 166.250.000, eingeteilt
in 66.500.000 auf den Namen lautende Stammaktien ohne
Nennbetrag (Stückaktien). Auf jede Stückaktie entfällt ein rechnerischer
Anteil am Grundkapital in Höhe von EUR 2,50.
Nach Durchführung der Kapitalerhöhung wird unser Grundkapital
EUR 249.375.000 betragen, eingeteilt in 99.750.000 auf den Namen
lautende Stückaktien.
Vorstand und Aufsichtsrat .......... Unser Vorstand besteht zum Datum dieses Prospekts aus zwei Mitgliedern:
Gisbert Rühl (Vorstandsvorsitzender) und Ulrich Becker.
Unser Aufsichtsrat besteht aus sechs Mitgliedern. Der Aufsichtsratsvorsitzende
ist Prof. Dr. Dieter H. Vogel.
Hauptaktionäre .................. AufderBasis der nach dem Wertpapierhandelsgesetz (WpHG) erhaltenen
Mitteilungen halten die folgenden Aktionäre zum Datum dieses
Prospekts direkt oder mittelbar einen erheblichen Stimmrechtsanteil
im Sinne der §§ 21ff. des WpHG:
Norges Bank (Zentralbank von Norwegen) — 1,84% der
Stimmrechte;
Amundi S.A. — 3,03% der Stimmrechte.
25

RISK FACTORS
Potential investors should carefully consider the specific risk factors outlined below in addition to the other
information contained in this prospectus before making a decision to purchase shares or related subscription rights.
Any of these risks could have a material adverse effect on Klöckner & Co’s business, financial condition and results
of operations. The market price of the Company’s shares could decline due to any of these risks, and investors could
lose all or part of their investment. Additional risks of which the Company is not aware at present could also impair
the business operations of Klöckner & Co and have a material adverse effect on Klöckner & Co‘s business
activities, financial condition and results of operations. The order in which the risk factors are presented below is
not indicative of their likelihood of occurrence or the scope of their financial consequences.
Risks Related to Our Business
Given the dependence of our industry on global economic conditions, the recent global economic crisis
has materially and adversely affected our business, results of operations and financial condition, and a
continued economic recovery will be important for the future of our business.
We are dependent on economic conditions globally and in particular in the markets we serve. The businesses of
our customers are for the most part dependent on general economic conditions, and when their business declines, we
will be affected, as well. Since mid-2008, worldwide economic conditions have experienced a significant downturn
due to turmoil in global financial systems, credit conditions impacted by the subprime mortgage crisis and other
factors, including slower economic activity, inflation and deflation concerns, reduced corporate profits, reduced or
cancelled capital spending, adverse business conditions and liquidity concerns, resulting in significant recessionary
pressures and lower business and consumer confidence. Global demand and prices for steel and other metals
decreased significantly in the latter part of 2008. Both trends continued well into 2009. Demand for our products
and pricing levels declined rapidly and significantly in the fourth quarter of 2008. This trend negatively impacted
our results of operations in 2008 and continued well into 2009. While economic conditions and our business started
to improve in the last quarter of 2009 and in 2010, they are far from the pre-crisis levels and there can be no
assurance that the economy will not come under pressure again. Moreover, real estate markets continue to be weak
and concerns about balance sheets of financial institutions and sovereign credit risks, the recent natural catastrophe
in Japan followed by a partial meltdown of a nuclear plant and upheavals in North Africa and adjacent Middle
Eastern countries all pose challenges for a continued recovery. In addition, the level of economic recovery varies
across our individual markets, and certain economies remain in a recessionary state. If we experience again slow
demand in our major markets and downward pressure on pricing, this would have a material, adverse effect on our
business, results of operations and financial condition. In addition, a prolonged period of low prices and volumes
could, at depressed margins, result in us being unable to cover our fixed costs, which could continue to adversely
affect our business, results of operations and financial condition, and lead to the need to downsize our business.
Our financial condition and results of operations depend in large part on the prices for metals. These
prices are inherently volatile, and rapid price changes could materially and adversely affect our
profitability and cash flow.
The prices that we pay for metals and hence the prices we are able to charge our customers may change
depending on many factors not under our control and subject to significant fluctuations, including general economic
conditions, costs of raw materials and energy for metal producers, competition, production levels, mill surcharges,
transportation costs, import duties and other trade restrictions, currency fluctuations and other factors that may be
difficult to predict. Furthermore, even in periods of strong demand, an excess supply of metals could result in lower
prices for metals. Decreases in the market price of metals usually require that we lower our selling prices. We
maintain substantial inventories of metals (approximately one third of total assets in the last three years) and record
inventory and the cost of materials at their weighted average cost but record sales at market prices. As a result, in
periods of rapid price declines as in the fourth quarter of 2008 and most of 2009, we experience evaluation losses
that adversely affect our profitability. While changes in prices and demand are a normal part of our business, the
negative development since the last quarter of 2008 has been significantly more dramatic than the economic
downturns we have experienced historically. In such periods of dramatic price declines, our competitors and we
attempt a destocking of inventory to clean out higher cost inventory. Aggressive destocking in an environment of
deteriorating customer demand caused extreme competitive pressure and materially and adversely affected our
margin. Steel mills have reacted to that economic environment by significantly reducing their production capacity.
However, steel mills have been tempted by falling prices for their raw materials (such as iron ore in 2009 and at the
beginning of 2010) to increase production to cover fixed costs, and such production may exceed demand. By
contrast, the recent all time highs in iron ore prices could lead to further increases in steel prices, which would
increase our working capital requirements. Recent and announced price increases may also have been driven by a
26

temporary demand increase only on the back of restocking effects and could likewise lead to an excessive increase
in steel supply going forward as steel mills may be tempted to increase their low capacity utilization to
unsustainable levels. If production discipline is so challenged, steel prices may start to decline again. In addition,
a sustained price recovery will depend on a broad economic recovery to underpin an increase in real demand by end
users.
The effect of price volatility on our cash flow is different from its effect on our profits. In periods of rapid price
increases, our working capital requirements typically increase, which adversely affects our operating cash flow.
These effects have been exacerbated in the past by customers attempting to anticipate future price changes.
Changing purchasing patterns during periods of significant price volatility have in the past significantly affected our
cash flow by affecting inventory volumes. Changes in metal prices and customer behavior could adversely affect
our business, financial condition and results of operations.
A failure to manage our working capital successfully could materially and adversely affect our
profitability and liquidity.
Working capital management is a key determinant of cash flow in our business. As explained in the preceding
risk factor, inventory volumes are strongly affected by metal prices and customer demand. Rapid inventory turnover
is therefore vital for our business. However, we may be unable to react quickly enough to changes in either factor. In
addition, working capital is also affected by changes to our trade payables and trade receivables position. Our
suppliers may demand shorter payment terms or refuse to sell to us on credit and our customers may fail to pay us on
time or demand longer payment terms, all of which would increase our working capital requirements. As our
business experiences seasonality effects with typically lower sales in the winter and summer months, sales change
from quarter to quarter, placing additional demands on our working capital management. If we are not successful in
managing working capital in the future, our operating cash flow, financial position and results of operations could be
adversely affected.
We service customers in industries that are cyclical and potentially significantly affected by economic
conditions, including the economic crisis, and downturns in these industries are reducing our sales and
profitability.
Many of our products are sold to customers in industries that experience fluctuations in demand based on
economic conditions (such as the global economic crisis in 2008/2009), energy prices, seasonality, consumer
demand and other factors beyond our control. These industries include in particular the construction industry, which
accounted for 39% of our 2010 sales, and other sectors such as industrial machinery and equipment, on-sellers,
appliances/durable goods manufacturers and the automotive industry, all of which were or continue to be affected
by recent and current economic conditions. Any downturn in demand within one or more of these industries may be
significant and may last for a prolonged period of time. The significant slowdown in the latter part of 2008 and most
of 2009 affected our customers across regions and industries and significantly reduced our sales and profitability.
While we experienced increased demand for industrial machinery and equipment in 2010, the construction industry
remains weak. Continued or further slowdowns would adversely affect our business, financial position and results
of operations.
Our business is very competitive and increased competition as well as further consolidation could impact
our sales and profitability.
Many of the markets we serve are highly competitive. Our competition includes the distribution affiliates of
metal producers and independent metal distributors, and competitiveness depends on various factors such as
location, inventory availability, service, price, quality, order size, production and processing capabilities and timely
delivery. Two of the largest European steel producers are also two of our largest suppliers and have distribution
affiliates which are our largest competitors in the Western European market. Steel producers may attempt to
intensify their own distribution activities, taking advantage of their greater financial resources, which would
increase competition. Some of our mill-tied competitors are larger than we are and may have greater financial and
other resources than we do. They may be able to commit more resources to the expansion of products and services
and the establishment of distribution locations and acquisitions, may be better able to withstand adverse changes in
our market, and may have greater operating and financial flexibility than we have. For example, in the fourth quarter
of 2008 and major parts of 2009, destocking of inventory, including sales below replacement costs in order to clear
inventories, further increased competitive pressure and negatively impacted margins in many of our markets. If we
are unable to compete effectively, we may lose customers and our business, financial position and results of
operations may be negatively affected.
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The global economic crisis had a negative impact on our customers, including the risk of insolvency,
which in turn has materially and adversely affected our results of operations and financial position.
The global economic crisis has had a significant negative impact on businesses, including on our customers,
across regions and industries throughout the world, which has resulted, in turn, in a significant negative impact on
our business. For example, we observed increased price sensitivity among our customers and a greater willingness
by our customers to shop around among competing distributors in order to find the least expensive source. In
addition, a disruption in the ability of our customers or significant customer groups, such as the construction sector,
to access sources of liquidity could cause serious disruptions to, or an overall deterioration of, their businesses
which could lead to a significant reduction in their future demand for our products and their ability to pay us
amounts due. We have substantial trade receivables on our balance sheet at any point in time (EUR 703.1 million as
of December 31, 2010 and EUR 924.6 million as of March 31, 2011). While we have entered into credit insurance
for the majority of these trade receivables, the financial crisis has had a negative effect on the availability and cost of
credit insurance for individual customers or entire customer groups in some of our markets. Our level of bad debt
has risen and we have already experienced difficulties in maintaining our historic level of credit insurance in some
markets. All of these factors could have a material adverse effect on our business, financial position and results of
operations.
Our financial condition and results of operations may be materially and adversely affected if we are
unable to control our operating costs.
Our main operating costs are wages and salaries, transportation costs, rent and leasing costs. These costs may
increase at any time due to factors that may be beyond our control and that we may not be able to predict. To the
extent we are not able to pass on increases in our operating costs to our customers, our results of operations may be
adversely affected. While we are continually reviewing our structures, global and regional footprint and processes
in order to identify potential cost savings and to right-size our global and regional reach, we cannot guarantee that
our cost saving measures will continue to be successful or yield the savings anticipated by us.
Currency and interest rate fluctuations may have a material impact on our financial condition and results
of operations.
In most countries in which we operate, we purchase and sell metal products and incur our operating expenses
mainly in the local currency. Accordingly, we have relatively limited exposure to currency risk from trading in
different currencies. However, we are still subject to translation risk because we prepare our consolidated financial
statements in euro and a portion of our assets, liabilities, sales, expenses and earnings is denominated in currencies
other than the euro. When preparing our consolidated financial statements, results in other currencies must be
translated into euros. Of the 15 countries in which we are active, the United States, Switzerland, the United Kingdom
and five countries with smaller markets use a currency other than the euro. Fluctuations in the values of these other
currencies with respect to the euro have had and may continue to have a significant impact on the reporting of our
financial condition and operating results. For example, in 2010, the increase in the value of the U.S. dollar relative to
the euro increased our reported sales in the United States by approximately 5%. Any long-term weakening of the
U.S. dollar or of other currencies, in particular the British pound and the Swiss franc, which we convert into euro for
financial reporting purposes, may reduce our reported profitability and will lessen the euro-value of sales generated
in such currencies. Currency fluctuations can also have a significant impact on our balance sheet, particularly
shareholders’ equity, when we translate the financial statements of our subsidiaries located outside the euro-zone
into euros.
We are also exposed to interest rate risk. As of December 31, 2010, we had gross indebtedness of
EUR 1,072 million, of which approximately EUR 454 million was floating rate, of which in turn EUR 247 million
was hedged by fixed rates derivative instruments. In addition to the European and a U.S. ABS Program with a
maximum volume of approximately EUR 420.0 million and USD 125.0 million, respectively, we had bank credit
facilities (including finance leases) in an amount of approximately EUR 950 million available as of December 31,
2010. The use of these facilities varies significantly depending on seasonal working capital requirements.
Fluctuations in interest rates may affect our interest expense on existing debt and the cost of new financing. If
the U.S. dollar/euro interest rate levels as of December 31, 2010, had been higher by 100 basis points, the financial
result for the following year would have been impacted negatively by EUR 2.1 million. Significant portions of our
financial instruments qualify as cashflow-hedges, the effects of which are recorded in equity rather than in our
income statement. If the U.S. dollar/euro interest rate levels as of December 31, 2010, had been higher by 100 basis
points, the financial effect would have led to an increase of equity of EUR 7.0 million. Currency and interest rate
fluctuations may have a material impact on our financial position and results of operations.
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Our acquisition strategy exposes us to risks; we may not be able to identify, finance, manage or integrate
recent and future acquisitions, and acquisitions may prove to be unsuccessful, which could adversely
affect our growth and profitability.
Our historical growth has relied mainly on acquisitions, and further acquisitions remain an integral part of our
strategy, both in the countries in which we currently operate and in new markets. We continuously evaluate potential
acquisition targets that may be significant. We cannot ensure that we will be able to identify suitable acquisition
candidates or complete acquisitions on satisfactory terms. Our ability to complete and finance acquisitions may also
be adversely affected by our existing leverage and any additional indebtedness we incur to pay for acquisitions may
adversely affect our liquidity and financial condition. In April, 2011 we acquired Macsteel Service Centers USA,
Inc. (“Macsteel”); separately we acquired the Frefer group in Brazil in May, 2011. We plan to integrate Macsteel as
well as Frefer into our existing US operations. This integration presents the parties involved with a series of specific
challenges, which in turn expose us to a series of risks that could emerge as a result of the following circumstances,
among others:
The integration of a new business that is located in a different country with different cultural background,
corporate culture and compensation structures always presents a challenge. It is therefore possible that at
some point in the future, the synergies that we expect to realize under our current business plan will not be
achievable, in whole or in part, or that our latest acquisitions might be disadvantageous to us. There is no
certainty that our acquisitions will contribute to our financial results to the extent we anticipated and on
which we based our purchase price calculation.
The integration of the new business acquired will claim a great deal of time and attention from the
management of both companies. To the extent that matters associated with the integration distract
management from their other tasks, our business may be adversely affected.
Both companies will rely on their respective executive employees to achieve the successful integration of
the two companies and implement a joint strategy. If we or the businesses acquired lose key employees, an
efficient and successful integration and the implementation of the strengths of our respective companies
could be jeopardized.
Acquired companies and businesses may not be in compliance with, or may not have complied in the past
with, all laws and regulations applicable to such businesses. Existing or new compliance-related issues
may arise with respect to businesses we acquire. In such case, we could be subject to claims, fines or other
sanctions or incur costs, which may adversely affect our business.
In relation to Frefer, the seller will retain a minority position and we have agreed in a shareholders’
agreement to certain minority rights that affect our full control of the business acquired to a certain extent.
Additional risks could emerge and unexpected problems could arise which we are unable to estimate at this
time. The occurrence of such events or any events such as those described above could make the integration of the
businesses acquired more difficult, more time-consuming and more expensive than expected, which could have
material adverse effects on our operations or our new subsidiaries’ operations, including our respective businesses,
financial conditions and results of operations. We cannot guarantee that the integration process will be successful or
that the businesses will be led and operated efficiently in the future.
Future acquisitions will likely result in additional indebtedness, may require the commitment of substantial
management resources and may also result in extraordinary or unforeseen legal, regulatory, contractual, labor, tax
or other obligations, liabilities or costs. The integration of acquired businesses involves substantial uncertainties and
requires, among other things, the ability to attract and retain sufficient numbers of qualified management and other
personnel. We may not be able to achieve the cost savings, synergies or other benefits that we hope to achieve from
acquisitions. Such risks could materially and adversely affect our business, financial condition and results of
operations.
In the course of our acquisitions, we have capitalized significant intangible assets which are subject to
amortization and impairment tests.
Our intangible assets amounted to approximately EUR 227 million as of December 31, 2010 (December 31,
2009: approximately EUR 195 million) and are largely attributable to the acquisitions we have completed over the
last few years. As of December 31, 2010, approximately EUR 117 million of intangible assets (such as customer
relationships, branches, patents, non-compete agreements and software) are subject to periodic amortization. The
remainder of approximately EUR 110 million relates to acquired goodwill which is not subject to amortization but
rather tested annually for impairment using a discounted cashflow-approach. In the context of our most recent
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acquisitions (Macsteel and Frefer), we expect the additional goodwill to be recorded on our balance sheet to be in
the low three digit million euro range, although the final amount may vary considerably depending on the purchase
price allocation that we expect to finalize later this year. If the carrying amount exceeds the recoverable amount, an
impairment loss is to be recorded, affecting our net income. A deterioration of the global economy and subsequently
of the demand for our products could result in such impairments. In our standalone financial statements prepared in
accordance with German GAAP, the corresponding book value of participations would also be affected negatively
by an impairment test which may significantly affect our ability to pay dividends. Accordingly, any impairments of
intangible assets will have a negative effect on our results of operations.
Our competitive position depends on our management team, and a loss of important members of our
management team could have a material adverse effect on our business.
Our ability to maintain a competitive position and to implement our business strategy is dependent to a large
degree on the performance of our senior management team, including the management board and other senior
managers. The loss of our senior managers’ services or an inability to attract, retain and maintain replacements or
additional personnel in a timely manner could have a material adverse effect on our business. In addition, we have a
decentralized management structure which provides our regional management with significant discretion over
operations in each region. Responsibility for profit and loss and reporting are allocated by region, and regional
management is responsible for making operational decisions, including product portfolio, pricing and sales
decisions. As a result, our regional managers have substantial local knowledge and client relationships, and the
loss of our regional managers could adversely affect our regional operations. Either of these risks could materially
and adversely affect our business, financial condition and results of operations.
We are subject to risks and uncertainties in the countries in which we operate and in new markets into
which we may expand.
As of December 31, 2010, we operated from 246 distribution locations in 15 countries in Europe and
North America. As part of our growth strategy, we plan to expand our operations into new markets, in particular in
emerging markets such as China in addition to our recent acquisition in Brazil. Some of the risks inherent in doing
business in our existing markets and in new markets include, but are not limited to, the following:
the rate of economic activity, industrial and infrastructure growth and the consequent impact on the
demand for metals;
liability risks;
currency exchange rate fluctuations;
foreign trade restrictions and exchange controls;
difficulties associated with the legal and regulatory systems in emerging markets;
economic, political and social instability; and
the potential imposition of, or increases in, tariffs, taxes and tax rates or other barriers to market entry,
all of which could adversely affect our business, financial condition and results of operations.
Lead time in obtaining our supplies and the cost of our products could increase if we were to lose one of
our primary suppliers.
We purchase our products from important strategic suppliers. However, we generally do not enter into longterm
purchase commitments. In 2010, approximately 12.5% of our purchasing volume was sourced from our largest
single supplier. Additionally, approximately 27.8% of our purchasing volume was met by the next four largest
suppliers. If, in particular, any of our main suppliers of construction steel, sheet metal, stainless steel, aluminum or
other metals should curtail or discontinue their delivery of such metals to us in the required quantities, qualities or at
competitive prices (e.g., due to strikes, production disruptions, lack of capacity or insolvency), we may be unable to
find adequate substitute suppliers on short notice. As a result, we would be unable to meet our delivery schedules or
to offer our products on competitive terms, which could adversely affect our business, financial position and results
of operations.
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Damage to or delays in the upgrade of our information technology infrastructure could harm our
business.
The unavailability of any of our information systems for any significant period of time could have a material
adverse effect on our operations. In particular, our ability to manage inventory levels successfully largely depends
on the efficient operation of our computer hardware and software systems. We use management information
systems to track inventory information at individual facilities, communicate customer information and aggregate
daily sales and margin information. Difficulties associated with upgrades, installations of major software or
hardware, and integration with new systems could have a material adverse effect on our results of operations. We are
in the process of finalizing the implementation and update of a SAP-based joint IT-platform for the European
companies of the Klöckner & Co Group. We may encounter transitional problems relating to this implementation or
update, which could cause cost overruns and affect the efficiency and productivity of some of our operations and
which could, consequently, adversely affect our business, financial condition and results of operations.
Investigations by competition authorities and damage claims from third parties for violations of applicable
antitrust laws could adversely affect our financial condition and results of operations.
We have been subject to a (reduced) fine of EUR 23.5 million by the French competition authority against our
subsidiary KDI S.A.S. for anti-competitive price fixing, which has been paid. In addition, the French competition
authority has launched investigations into alleged anti-competitive practices against two of our subsidiaries, KDI
Davum S.A.S. on La Réunion and Reynolds European S.A.S. in Rueil Malmaison, which are still pending. We are
fully cooperating with the French authorities in their investigations. We installed a new group-wide antitrust
compliance system in 2007/2008, which we expanded in 2008/2009, and believe that we are now better positioned
to detect and deter anti-competitive practices. However, we cannot exclude that we will be subject to further
investigations in the future, in particular as our increasing steel service center activities pose additional compliance
issues due to, among other factors, their longer term business character.
To the extent these or other investigations were to result in findings that a subsidiary (or a trade association of
which a subsidiary is a member) violated applicable antitrust laws, such subsidiary (or trade association) could be
fined by the relevant authority, which fines may be significant (and, if imposed on a trade association, could
indirectly result in significant liabilities of our relevant subsidiaries). In addition to potential fines that could be
imposed by the French and other competition authorities, damage claims could be brought against these subsidiaries
for alleged violations of applicable competition laws. We may also lose customers as a result of such investigations.
If any third party were to bring such damage claims or if any fines were to result from these or future antitrust
investigations, our business, financial condition and results of operations could be adversely affected.
Strikes or other labor-related conflicts at the Klöckner & Co Group, in the steel or metal industries or in
certain customer industries could have an adverse effect on our business.
Although we have no history of any significant operational disruptions affecting several locations simultaneously
as a result of labor-related conflicts, we cannot ensure that such operational disruptions will not occur in the
future. This risk may increase due to our ongoing negotiations with works council to cut labor costs. Labor-related
conflicts could lead to business interruptions or supply difficulties. In addition, a significant disruption of operations
in the steel or metal industries at the suppliers’ end could lead to the interruption of production and consequently to
delivery cancellations. Finally, labor-related conflicts at the customers’ end could have an adverse effect on
demand. Any such conflicts could have an adverse effect on our business, financial condition and results of
operations.
We could incur substantial costs in order to comply with, or to address any violations of or liabilities
under, environmental laws, both in Europe and in North America, that could significantly increase our
operating expenses and negatively affect our financial condition and results of operations.
Many of our facilities are located in industrial areas, in particular in areas previously used for coal mining or by
the steel industry, and we and predecessor operators of these facilities may have generated, used, handled and
disposed of, hazardous and other regulated wastes. There is a latent risk that these premises may be contaminated
from former industrial uses. Even if we were not responsible for the contamination, we may be responsible for the
cleanup on properties owned or leased by us. In addition, some of the buildings owned or leased by us may include
asbestos or other hazardous materials that would eventually have to be removed. At some of our current and former
sites contaminations have been detected and therefore we may be subject to environmental liabilities, including
cleanup obligations at these facilities or at off-site locations where materials from our operations were disposed of,
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which could result in future expenditures that cannot be currently quantified and which could have a material
adverse effect on our financial position, results of operations or cash flow.
In addition, some of our operations, such as our processing centers where we use hazardous substances such as
lubricants and cleaning solvents, are subject to environmental laws and regulations that impose limitations on the
discharge of pollutants into the air and water and establish standards for the treatment, storage and disposal of solid
and hazardous wastes. Failure to maintain or achieve compliance with these laws and regulations or with the permits
required for our operations could result in substantial operating costs and capital expenditures, in addition to fines
and civil or criminal sanctions, third-party claims for property damage or personal injury, clean-up costs or
temporary or permanent discontinuance of operations.
We face compensation claims in the United Kingdom that were brought by former employees of one of our
subsidiaries. These former employees were exposed to asbestos during a period extending from the 1940s through
the 1960s while working in a line of business that has since been discontinued. Due to the insolvency of its insurer,
our subsidiary Richardsons Westgarth Ltd. is directly faced with these claims. As of March 31, 2011, 15 claims were
still pending, 7 of which were brought in 2010 and 3 of which were brought in 2011, and we had provisions in the
amount of GBP 1.381 million in respect of these claims. If the plaintiffs are awarded damages in excess of the
provisioned amounts or if there are material future claims in this regard, our financial condition and results of
operations could be adversely affected.
We have significant liabilities with respect to our pension plans and the actual costs of our pension plan
obligations could exceed current estimates.
Various types of pension schemes have been established for most employees of the Klöckner & Co Group,
depending on the legal, economic and tax environment of the respective jurisdictions. For the most part, the pension
schemes are designed as defined benefit plans, either funded or unfunded. As of December 31, 2010, the present
value of our defined benefit obligations pursuant to funded and unfunded plans was EUR 735.6 million, and the fair
value of the corresponding plan assets of funded plans was EUR 555.5 million, resulting in an underfunding of
EUR 180.1 million, up from EUR 165.3 million in 2009. The provision in our financial statements for pension and
other similar liabilities was EUR 174.4 million. The amount of our pension obligations was determined on the basis
of actuarial assessments, but our actual costs for benefits required to be paid may exceed these assessments. In such
event, the adjustments required to be made to our recorded provision for these benefits could have a material
adverse effect on our results of operations and financial condition, and cash payments to fund these plans could have
a material adverse effect on our cash flow. We may be required to make further provisions in respect of our pension
plan liabilities, which may have a material adverse effect on our financial position and results of operations.
If costs arising in connection with our intra-group restructurings and financings are not recognized for
tax purposes, or if tax or social security authorities assert subsequent claims on other grounds, this could
have a material adverse effect on the financial condition and results of operations of the Klöckner & Co
Group.
Over the course of the last several years, there have been several changes in the ownership structure of the
Klöckner & Co Group that have resulted in restructurings as well as further intra-group restructurings of companies
that have been or continue to be part of the Klöckner & Co Group. There have also been changes in our financing
structure. The majority of companies that are part of the Klöckner & Co Group are subject to regular tax audits.
There is no assurance that tax or social security authorities will not impose additional claims on us or any of our
subsidiaries as a result of future tax or other audits or that reserves which have been set aside will be sufficient or that
losses carried forward can be claimed. Any of these consequences could have a material adverse effect on the
financial condition and results of operations of the Klöckner & Co Group. Within the framework of Klöckner &
Co’s acquisition of its economic predecessor in 2005, transaction costs were incurred which have been passed on to
the companies of the Klöckner & Co Group, and the financing structure has been amended. We cannot assure you
that tax authorities in the respective jurisdictions will, or will fully, permit the expenses of the companies of the
Klöckner & Co Group in connection with such transaction costs and the financing structure to be deducted for local
tax purposes, which would have a material adverse effect on our financial condition and results of operations.
As at December 31, 2010, we had losses carried forward in the amount of approximately EUR 342 million in
respect of corporate income tax and approximately EUR 232 million in respect of trade tax and similar taxes. To a
significant extent, these losses carried forward are currently not utilizable. It cannot be ruled out that, in the future,
these losses will be eliminated in whole or in part or that their usefulness will be permanently restricted:
As of 2008, the use of current losses and losses carried forward by corporations has been significantly
restricted by sec. 8c of the German Corporate Income Tax Act (Körperschaftsteuergesetz, “KStG”)
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addressing considerable changes in the shareholder base of a corporation. For changes of shareholdings of
more than 25% up to 50%, the loss deduction decreases proportionally, and for transfers of shares or
voting rights of more than 50% within a five-year period, the loss deduction is eliminated in full, provided
in both cases that the shares are transferred to one acquirer or a group of acquirers. This is also true of
share movements based on the non-exercise of subscription rights and the acquisition of shares by new
shareholders in the course of this offering or future capital increases. In addition, under sec. 8(4) KStG in
the version before entering into force of the Corporate Tax Reform Act 2008 (Unternehmensteuerreformgesetz
2008), sec. 34(6) s. 3 KStG the utilization of tax losses carried forward by Klöckner & Co SE
or other German corporations of the Klöckner & Co Group would be excluded if the corporation claiming
utilization is not economically identical with the corporation incurring the loss. Economic identity
typically ceases to exist if (i) more than 50% of the shares in the relevant corporation are transferred
within a period of five years and such period has commenced prior to January 1, 2008, and (ii) such
corporation’s business is continued or resumed with predominantly new business assets. The utilization of
tax losses is excluded under sec. 8(4) KStG, if the loss of the economic identity occurs prior to January 1,
2013. However the losses carried forward forfeit according to the view of the tax authorities in the fiscal
year in which the original economic identity of the corporation that incurred the losses ceases to exist.
However, as of 2010, the above-described limitations may not apply if the registered share capital or
voting rights are transferred to certain transferees belonging to the group as further defined in the
pertinent provisions of which the Company forms part (Konzernklausel) or to the extent that the losses do
not exceed the built-in gains which are taxable in Germany (Verschonungsregelung).
Similar or other tax laws could restrict the use of losses carried forward in jurisdictions outside of
Germany.
Furthermore, offsetting net income against losses carried forward is only possible to a limited extent
because of the “minimum taxation” specified by sec. 10d of the German Income Tax Act
(Einkommensteuergesetz).
Additional tax charges for past fiscal years or the elimination of the loss deduction could increase our future tax
burden significantly. Furthermore, tax amendments, such as the recently introduced interest caps, which severely
restrict the deductibility of interest payments in connection with taxation, could result in a higher tax burden and
thus also have a material adverse effect on our cash flows, financial condition and results of operations. In
particular:
Effective from 2008 the German interest barrier rule (Zinsschranke) was introduced. Under this rule,
generally for corporate income tax purposes, the deduction of net interest expenses (i.e. interest income
less interest expenses) as a general rule is restricted to 30% of EBITDA (as modified under sec. 4h
German Income Tax Act, Einkommensteuergesetz). Unutilized net interest expenses can be carried
forward to future fiscal years and might be utilized within the 30% of EBITDA amount in the relevant
fiscal year. In principle, exemptions from the 30% rule are available but it is not likely that companies of
the Klöckner & Co. Group are in a position to benefit to a significant extent from these exemptions. Due
to the deteriorating results of the German operations in 2008, the tax deductibility of interest expenses
was already restricted by the interest barrier rule. Non-deducted net interest expenses will be carried
forward. However, the interest carried forward forfeits under the same conditions like other tax losses
carry forwards pursuant to sec. 8c KStG.
Similar or other tax laws could restrict the deductibility of interest expenses in jurisdictions outside
Germany.
Our insurance policies provide limited coverage, potentially leaving us uninsured against some business risks.
We may not be fully insured against terrorism or certain business risks. The occurrence of an event that is
uninsurable or not fully insured could have a material adverse effect on our business, financial condition, results of
operations or prospects. The occurrence of accidents that cause losses in excess of limits specified under our
insurance policies, or losses arising from events not covered by insurance policies, could have a material adverse
effect on our business, financial condition and results of operations.
We may face significant product liability or warranty claims that may be costly, and which could
negatively affect our financial condition and results of operations, and create adverse publicity.
We rely on mill certifications attesting the physical and chemical specifications of the metal supplied and
generally do not undertake independent testing of such metals on our own. If any of the products that we sell causes
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harm to any of our customers or its end-users or does not meet the specifications agreed, we could be exposed to
product liability or warranty claims. If we are found liable under such claims, we could be required to pay
substantial monetary damages. Further, even if we successfully defend ourselves against this type of claim, we
could be forced to spend a substantial amount of money in litigation expenses, our management could be required to
spend valuable time in the defense against these claims, we could lose important customers and our reputation could
suffer. We may also be unable to trace the supplier from which we bought the relevant product sold by us or our
recourse against such supplier may be limited by other factors. Any of these factors could harm our business,
financial position and results of operations.
If we fail to meet our obligations under our financing agreements, our creditors could declare all
amounts owed to them due and payable, which could lead to liquidity constraints.
Our ability to comply with the covenants and restrictions in our financing agreements may be affected by
events beyond our control. These include general economic, financial and industry conditions. If we breach any of
these covenants or restrictions, we could be in default under the credit facilities and other indebtedness. In addition
to our Senior Revolving Credit Facility, our financing instruments include, in particular, three convertible bonds and
the European and U.S. ABS Programs.
In the event of a default under our Senior Revolving Credit Facility or certain other defaults under any other
agreement, the lenders under the respective facilities or financing instruments could take certain actions, including
terminating their commitments and declaring all amounts that we have borrowed under our credit facilities and
other indebtedness to be due and payable, together with accrued and unpaid interest. In addition, borrowings under
other debt instruments that contain cross-acceleration or cross-default provisions may as a result also be accelerated
and become due and payable.
Our Senior Revolving Credit Facility Agreement, other financing agreements and the convertible bonds
contain change of control clauses. If a person or a group of persons acting in concert gain control in Klöckner & Co
SE (generally meaning the acquisition, directly or indirectly, of more than 50 percent of the voting rights in
Klöckner & Co SE), the relevant creditor has a right of early termination, resulting in the indebtedness becoming
due and payable, together with accrued and unpaid interest.
If the debt under the credit facilities and other indebtedness or any other material financing arrangement that
we enter into were to be accelerated, our assets may be insufficient to repay in full our debt and our financial
position would be significantly adversely affected.
We may incur significant indebtedness, which may impair our financial and operating flexibility.
We may incur significant indebtedness, which will impose significant debt service obligations. On March 31,
2011, we had indebtedness in a gross amount before deduction of transaction costs of approximately
EUR 1,155.2 million outstanding under several different facilities including our Senior Revolving Credit Facility.
We anticipate that our leverage will continue for the foreseeable future. Our level of indebtedness could have
important consequences, including, but not limited to:
increasing our vulnerability to a continuing economic downturn and/or downturn in our business;
limiting our ability to obtain additional financing to fund future working capital, capital expenditures,
business opportunities and other corporate requirements and, if additional financing is obtained, making
that financing more costly than current debt costs;
requiring the dedication of a large portion of our cash flow from operations to the payment of principal of,
and interest on, our indebtedness, which means that this cash flow will not be available to fund our
operations, capital expenditures or other corporate purposes;
limiting our flexibility in planning for, or reacting to, changes in our business, the competitive environment
and the industry;
subjecting us to the risk of increased sensitivity to interest rate increases on our indebtedness with variable
interest rates, including borrowings under our Senior Revolving Credit Facility; and
placing us at a competitive disadvantage compared to our competitors that have less debt or are less
leveraged or have a shareholder with a stronger financial position like distributors with a steel producer as
parent company.
Any of these or other consequences or events could have a material adverse effect on our ability to satisfy our
debt obligations and our financial position could be significantly adversely affected.
34

Our ability to generate sufficient cash to service our debt depends on many factors beyond our control.
Our ability to make interest and principal payments on and to refinance our debt, and to fund working capital
and capital expenditures, will depend on our future operating performance and ability to generate sufficient cash.
Upcoming maturities in our financing structure include the maturity of one of our convertible bonds with a nominal
amount of EUR 325 million in July 2012, the expiration of the European ABS Program in March 2013, and the
expiration of our Senior Revolving Credit Facility in May 2014. Our ability to generate sufficient cash flow from
operations depends on general economic, financial, competitive, market, legislative, regulatory and other factors,
many of which are beyond our control. Our cash flow from operations may be adversely impacted by a new
downturn in worldwide economic conditions, which may result in a decline in global demand for our products and
services, softening of prices and reducing our margins.
There is no assurance that our business will generate sufficient cash flow from operations or that future debt
and equity financing will be available to us in an amount sufficient to enable us to pay our debts when due or to fund
our other liquidity needs. If our future cash flow from operations and other capital resources (including borrowings
under the Senior Revolving Credit Facility, the ABS Programs and the Convertible Bonds) are insufficient to pay
our obligations as they mature or to fund our liquidity needs, we may be forced to:
reduce or delay our business activities and capital expenditures;
sell assets;
obtain additional debt or equity capital; or
restructure or refinance all or a portion of our debt on or before maturity.
We may not be able to accomplish any of these alternatives on a timely basis or on satisfactory terms, if at all. If
we were unsuccessful in pursuing either of these alternatives, our financial position would be significantly adversely
affected.
Lack of available funding and higher costs for funding in the difficult current credit conditions may have
a material impact on our financial condition and results of operations.
Our ability to refinance our debt, incur additional debt and issue additional equity, the terms of possible
additional debt and our liquidity could be affected by a number of adverse developments. In the third quarter of
2008, the global debt markets were subject to significant pressure triggered by the collapse of the sub-prime
mortgage market in the United States. This liquidity crunch continued through and worsened in the remainder of
2008 and also impacted large parts of 2009, leading to unprecedented volatility in the financial markets, an acute
contraction in the availability of credit, including in interbank lending, reduced willingness of equity underwriters
to take on risk, and the failure of a number of leading financial institutions. While economic conditions and
financial markets have improved somewhat since 2009, regulatory actions in the banking industry, including higher
capital requirements, have had a negative effect on lending conditions. Many lenders and institutional investors
have increased interest rates, imposed tighter lending standards, refused to refinance existing debt on terms similar
to those for the existing debt or at all, and reduced and, in some cases, ceased to provide any new funding. Increased
awareness of sovereign debt risks have likewise affected credit markets negatively.
These adverse developments in the credit markets, as well as other future adverse developments, such as
repeated deterioration in the financial markets and a worsening of general economic conditions, may negatively
impact our ability to issue additional debt and/or equity as well as the amount and terms of the debt we are able to
issue. Our liquidity will be adversely affected if we must repay all or a portion of our maturing debt from available
cash or through use of our existing liquidity facilities. In addition, our results of operations will be adversely
impacted to the extent the terms of the debt we are able to issue are less favorable than the terms of debt being
refinanced thereby. It is also possible that we will need to agree to covenants that place additional restrictions on our
business.
Volatility in the commercial paper market and the solvency of certain financial institutions may affect
funding costs or our ability to receive cash under our ABS Programs.
Our European ABS Program relies on conduit lenders issuing commercial paper to finance purchases of trade
receivables originated by our participating subsidiaries. If a conduit lender is unable to issue commercial paper as
requested under the European ABS Program, certain banks have committed to provide back-up loans instead of the
issuance of commercial paper. If funding costs increase as a result of volatility in the commercial paper market or
the use of bank loans, our financial results would be adversely affected. If the banks committed to providing back-up
loans under the European ABS Program, or the financing bank under the U.S. ABS Program, respectively, were to
35

ecome insolvent or otherwise unable to meet their funding obligations, our liquidity and financial position would
be adversely affected.
We are subject to restrictive debt covenants, which may limit our operating flexibility.
Some of our credit facilities contain covenants that restrict some of our corporate activities, including our
ability to:
incur certain types of indebtedness;
create liens;
make loans or issue guarantees;
dispose of assets;
merge or consolidate with other companies; and
make a substantial change to the general nature of our business.
In addition, certain of our financing facilities require us to comply with certain affirmative covenants and to
maintain specified financial ratios and satisfy specified financial tests.
These covenants could limit our ability to finance our future operations and capital needs and our ability to
pursue acquisitions and other business activities that may be in our interest.
Klöckner & Co SE is a holding company and dependent on dividend payments from its subsidiaries,
affecting its own ability to pay dividends.
Klöckner & Co SE is a holding company that does not directly conduct any business operations. Its only assets
are capital stock of its direct subsidiaries, many of which are themselves holding companies. These subsidiaries may
not be able to make distributions to the Company. Even if a particular subsidiary records a profit, transfer of such
profit to its direct parent company requires a shareholders’ resolution unless a profit and loss transfer agreement has
been put in place. In addition, any payment of interest, dividends, distributions, loans or advances by the Company’s
subsidiaries could be subject to restrictions on dividends under applicable local law in which the subsidiaries
operate or contractual limitations, both of which may in turn affect our ability to pay dividends. If we do not receive
sufficient distributions, the financial position and results of operations of Klöckner & Co SE and its ability to pay
dividends would be adversely affected.
Risks Related to the Offering
The capital markets and the price of our shares have been and may continue to be volatile.
In recent years, both the capital markets and the price of our shares have been considerably volatile. The recent
turmoil in the global financial system has caused historic levels of equity volatility. In 2008, our stock price
fluctuated between EUR 40.50 and EUR 7.65, in 2009 between EUR 18.93 and EUR 4.87 and in 2010 between
EUR 23.46 and EUR 13.65 (XETRA closing prices). Such price fluctuations may continue to occur in the future.
These price fluctuations may be attributable to both the high volatility of the capital markets in general and to
particular developments in our industry, business, financial condition and results of operations.
In addition to our business, financial condition and results of operations, the following factors, among others,
can also influence our share price:
the market’s expectations with regard to the performance and capital adequacy of corporations in our
industry and the actual performance of those corporations;
our membership in the MDAX;
potential litigation or regulatory action involving us or individual industry sectors that impact our
business;
public announcements regarding insolvencies or similar restructuring measures and investigations into
the accounting practices at other industrial corporations; and
changes in our free float or shareholder structure.
36

It is therefore possible that in the future our shares will be subject to high fluctuations and that significant share
price declines may occur. In addition, the subscription price of the New Shares plus the price for the corresponding
subscription rights may not correspond to the price at which our shares will trade after completion of this offering.
The holdings of shareholders who do not participate in this offering will be diluted.
Subscription rights that are not exercised by June 9, 2011 will expire. Shareholders who do not exercise their
subscription rights will experience a decrease in the relative interest they hold in our issued share capital and in the
voting rights.
If the offering is not completed, or if our share price significantly decreases, the subscription rights could
become worthless.
The New Shares are being subscribed for by the Underwriters, who have undertaken to offer them for
subscription to our shareholders. The shares are being subscribed pursuant to an underwriting agreement, which the
Underwriters may terminate under certain circumstances. If the underwriting agreement is terminated, the offering
becomes void and the subscription rights will expire and become worthless. Investors who have acquired their
subscription rights on the secondary market will suffer a corresponding loss, since they will not be able to unwind
their subscription right trades after the offering is terminated. If investors have sold New Shares prior to the
cancellation of the crediting of these shares in case the offering is terminated, they will bear the risk of being unable
to meet their delivery obligation under such sales.
In addition, the value of the subscription rights depends largely on the price of our shares. A significant
decrease in the price of our shares can therefore also have an adverse effect on the value of the subscription rights. If
the price of our shares drops below the subscription price for the new shares, subscription rights would become
worthless.
It is not certain that an active trading market will develop for the subscription rights. If such trading does
develop, the subscription rights may be subject to greater price fluctuations than our shares.
We intend to have the subscription rights traded on the regulated market of the Frankfurt Stock Exchange
during the period from and including May 27, 2011, until and including June 7, 2011. We do not intend to file an
application for the trading of the subscription rights on any other stock exchange. It is not certain that an active
trading market will develop for the subscription rights on the Frankfurt Stock Exchange, or that sufficient liquidity
will be available during the entire subscription rights trading period. In accordance with German market practice,
the price of subscription rights is determined only once a day. The market price of the subscription rights depends,
among other things, on the movement of the price of our shares, but it may be subject to considerably greater price
fluctuations than the price of our shares. It is therefore possible that the trading price of subscription rights does not
correspond to their inherent mathematical value.
If shareholders sell a large volume of our shares, this could cause significant downward pressure on the
price of our shares.
The price of our shares could be impaired severely by a potential sale of a larger number of shares by
shareholders. None of our shareholders is restricted in its ability to sell shares. There is no assurance that the current
shareholders will continue to hold their shares in Klöckner & Co SE. Moreover, a decline in the price of our shares
resulting from sales of a larger number of shares could make it more difficult for us to issue new shares at the time
and price we deem reasonable.
37

Responsibility for the Contents of this Prospectus
GENERAL INFORMATION
Klöckner & Co SE with its registered office in Duisburg, Germany (the “Company”, and together with its
subsidiaries on a consolidated basis “we”, “us”, “our”, the “Klöckner & Co Group”, “Klöckner & Co” or the
“Group”), and Deutsche Bank Aktiengesellschaft, Frankfurt am Main, Germany, and J.P. Morgan Securities Ltd.,
London, United Kingdom, (the “Joint Global Coordinators”) and COMMERZBANK Aktiengesellschaft, Frankfurt
am Main, Germany, HSBC Trinkaus & Burkhardt AG, Düsseldorf, Germany, The Royal Bank of Scotland N.V.
(London Branch), London, United Kingdom, and UniCredit Bank AG, Munich, Germany (together with the Joint
Global Coordinators, the “Underwriters”), assume responsibility for the content of this prospectus pursuant to
Section 5 para. 4 German Securities Prospectus Act (Wertpapierprospektgesetz) and declare that the information
contained in this prospectus is, to their knowledge, accurate and contains no material omission, and that they have
taken all reasonable care to ensure that the information contained in this prospectus is, to their knowledge, correct
and contains no omission likely to affect its import. Notwithstanding Section 16 of the German Securities
Prospectus Act, neither we, nor the Underwriters, are required by law to update this prospectus.
Documents Available for Inspection
For as long as this prospectus is valid, the following documents, or copies thereof, may be inspected during
regular business hours at our offices at Am Silberpalais 1, 47057 Duisburg, Germany (and via our website
www.kloeckner.de):
The articles of association of Klöckner & Co SE;
Our consolidated interim financial statements (IFRS) as of and for the three months ended March 31, 2011;
Our consolidated financial statements (IFRS) as of and for the financial years ended December 31, 2008, 2009
and 2010; and
The Company’s unconsolidated financial statements (HGB) as of and for the financial year ended
December 31, 2010.
Subject Matter of this Prospectus
For purposes of the public offering and for purposes of the admission to the regulated market (regulierter
Markt) of the Frankfurt Stock Exchange and to the sub-segment of the regulated market with further post-admission
obligations of the Frankfurt Stock Exchange (Prime Standard), the subject matter of this prospectus is the offering
of 33,250,000 new ordinary registered shares with no par value, each representing a proportionate amount of our
issued share capital of EUR 2.50, with full dividend entitlement as of January 1, 2011, from the capital increase
against cash contribution from authorized capital with subscription rights resolved by our management board on
May 26, 2011 with the approval of our supervisory board on May 26, 2011 (the “New Shares”). The New Shares are
subject to German law.
Forward-Looking Statements
This prospectus contains certain forward-looking statements. A forward-looking statement is any statement
that does not relate to historical facts and events. This applies, in particular, to statements in this prospectus
containing information on future earning capacity, plans and expectations regarding our business and management,
our growth and profitability, and general economic and regulatory conditions and other factors that affect us.
Forward-looking statements in this prospectus are based on current estimates and assumptions that we make to
the best of our present knowledge. These forward-looking statements are subject to risks, uncertainties and other
factors which could cause actual results, including our financial condition and results of operations, to differ
materially and more negatively from the results that we have expressly or implicitly assumed or described in these
forward-looking statements. Our business is also subject to a number of risks and uncertainties that could cause a
forward-looking statement, estimate or prediction in this prospectus to become inaccurate. Accordingly, investors
are strongly advised to read in particular the following sections of this prospectus: “Summary”, “Risk Factors”,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Business” and
“Recent Developments and Outlook”. These sections include more detailed descriptions of factors that might have
an impact on our business and the markets in which we operate.
In light of these risks, uncertainties and assumptions, future events described in this prospectus may not occur,
and forward-looking estimates and forecasts derived from third-party studies that have been reproduced in this
38

prospectus may prove to be inaccurate. See ‘‘— Presentation of Sources of Market Data”. In addition, neither we
nor the Underwriters assume any obligation, except as required by law, to update any forward-looking statements or
to conform these forward-looking statements to actual events or developments.
Presentation of Sources of Market Data
In this prospectus, we rely on and refer to information regarding our business and the market in which we
operate and compete. We obtained this information from various third-party sources, discussions with our
customers and our own internal estimates. Third-party sources include in particular the following studies:
Eurometal — Research Report 02/2011 as of March 26, 2011 (“Eurometal”);
Metals Service Center Institute — Metals Activity Report December 2010 (“MSCI”);
Steel Business Briefing June 2, 2010 (“Steel Business Briefing”);
World Steel Association — Worldsteel Short Range Outlook April 18, 2011 (“World Steel Association”);
Instituto Aço Brasil — Aço Brasil Informa, 2010 (“IABr”).
Where information has been sourced from a third party, this information has been accurately reproduced and,
as far as we are aware and able to ascertain from information published by that third party, no facts have been
omitted which would render the reproduced information inaccurate or misleading.
Industry publications, surveys and forecasts generally state that the information contained therein has been
obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not
guaranteed and in some instances state that they do not assume liability for such information. We cannot assure you
of the accuracy and completeness of such information as we have not independently verified such information.
In addition, in many cases we have made statements in this prospectus regarding our industry and our position
in the industry based on our experience and our own investigation and estimates of market conditions. We cannot
assure you that any of these assumptions are accurate or correctly reflect our position in the industry, and none of our
internal surveys or information has been verified by any independent sources. Some of the surveys or sources were
compiled by our advisors and are not publicly available and accordingly may not be considered to be as independent
as other third-party sources.
Negative Numbers; Differences in Rounding
Numbers in parentheses in this prospectus denote a negative amount. Certain numerical figures (including
percentages) in this prospectus have been rounded. In tables and charts, these rounded figures may not add up
exactly to the totals contained in the respective tables and charts.
39

General
THE OFFERING
The offering consists of a total of 33,250,00 New Shares. The New Shares will be offered for subscription to
our shareholders at a ratio of 2:1, i.e. 1 New Share for 2 old shares. The offering includes a public offering in
Germany and Luxembourg. The subscription price is EUR 15.85 per New Share. New Shares that are not subscribed
for in the subscription offer will be offered for sale in a private placement to qualified investors in Germany and
elsewhere, except for Canada, Japan and Australia, in the offering. In the United States, the New Shares will only be
offered to “qualified institutional buyers” as defined in Rule 144A under the U.S. Securities Act of 1933, as
amended (the “Securities Act”), in reliance on an exemption from the registration requirements of the Securities
Act.
The offering is based on an underwriting agreement dated May 26, 2011 between us and the Underwriters.
Among other conditions, the offering is subject to registration of our capital increase from authorized capital in the
commercial register of the local court of Duisburg, which is scheduled for June 8, 2011.
Under certain circumstances, the offering may be terminated prematurely or extended. See “— Subscription
Offer — Important Notice”.
Timetable
The expected timetable for the offering is as follows:
May 26, 2011 . . . ........................... Publication of the prospectus on our website
May 26, 2011 . . . ........................... Publication of the subscription offer in the electronic
version of the German Federal Gazette
(Bundesanzeiger)
May 27, 2011 . . . ........................... Publication of the subscription offer in the
Frankfurter Allgemeine Zeitung
May 27, 2011 . . . ........................... Subscription rights credited to shareholders as of the
evening of May 26, 2011
Commencement of the subscription period and of
trading in the subscription rights
June 7, 2011 ............................... Endoftrading in the subscription rights
June 8, 2011 ............................... Registration of our capital increase in the commercial
register (Handelsregister)
June 9, 2011 ............................... Admission to trading on the Frankfurt Stock
Exchange
June 9, 2011 ............................... Endofthesubscription period
Last day for payment of the subscription price
June 10, 2011 . . . ........................... Delivery of the subscribed New Shares to the
collective securities depositary
Inclusion of the New Shares in the existing price
quotation of the Company’s shares
The prospectus will be published on the Company’s website (http://www.kloeckner.de). Printed copies of the
prospectus will be available free of charge from Klöckner & Co SE, Am Silberpalais 1, 47057 Duisburg, Germany,
from Deutsche Bank Aktiengesellschaft, Große Gallusstraße 10-14, 60311 Frankfurt am Main, Germany, and
J.P. Morgan AG, Junghofstraße 14, 60331 Frankfurt am Main, Germany, Deutsche Bank Luxembourg S.A., 2
Boulevard Konrad Adenauer, L-1115 Luxembourg, J.P. Morgan, 6 Route de Treves, Senningerberg, L-2633
Luxembourg, as well as from COMMERZBANK Aktiengesellschaft, Kaiserstrasse 16 (Kaiserplatz), 60311
Frankfurt am Main, Germany, HSBC Trinkaus & Burkhardt AG, Königsallee 21/23, 40212 Düsseldorf, Germany,
The Royal Bank of Scotland N.V. (London Branch), 250 Bishopsgate, London EC2M 4AA, United Kingdom, and
UniCredit Bank AG, Kardinal-Faulhaber-Str. 1, 80333 Munich, Germany.
40

Subscription Offer
The German language version of the subscription offer set forth below is expected to be published on May 26,
2011 in the electronic version of the German Federal Gazette (Bundesanzeiger) and on May 27, 2011 in the
Frankfurter Allgemeine Zeitung:
The management board resolved on May 26, 2011, with the approval of the supervisory board on May 26,
2011, to increase the Company’s issued share capital by EUR 83,125,000 from EUR 166,250,000 to
EUR 249,375,000 utilizing authorized capital in accordance with Section 4, para. 5a of the articles of
association of Klöckner & Co SE by issuing 33,250,000 new ordinary registered shares with no par value, each
representing a proportionate amount of the Company’s issued share capital of EUR 2.50, against cash
contribution (the “New Shares”). The New Shares entitle holders to dividend payments as from January 1,
2011. A syndicate of banks with Deutsche Bank Aktiengesellschaft and J.P. Morgan Securities Ltd. acting as
Joint Global Coordinators together with COMMERZBANK Aktiengesellschaft, HSBC Trinkaus & Burkhardt
AG, The Royal Bank of Scotland N.V. (London Branch), and UniCredit Bank AG (together with the Joint
Global Coordinators the “Underwriters”) has agreed to subscribe for the New Shares pursuant to an
underwriting agreement dated May 26, 2011 (the “Underwriting Agreement”) and has agreed to offer the
New Shares to the shareholders subject to the terms set forth below under “Important Notice”. The New Shares
are offered to shareholders at a ratio of 2:1 at a subscription price of EUR 15.85 per New Share. The capital
increase is expected to be registered in the commercial register of the local court of Duisburg on June 8, 2011.
Clearstream Banking AG, Mergenthalerallee 61, 65760 Eschborn, Germany, will automatically credit the
subscription rights from the existing shares held in collective custody as of the evening of May 26, 2011 to the
accounts of the depositary banks.
To avoid having their subscription rights lapse, shareholders must exercise their subscription rights
to the New Shares during the period from
May 27, 2011 up to and including June 9, 2011
through their depositary bank at the subscription agent listed below during normal business hours.
Any subscription rights that are not exercised by the deadline will expire.
The subscription agent in Germany is Deutsche Bank Aktiengesellschaft including its domestic branches.
In accordance with the subscription ratio, every 2 existing shares entitle investors to subscribe for 1 New
Share at a subscription price of EUR 15.85 per New Share.
Subscription Price
The subscription price is EUR 15.85 per New Share subscribed and is payable no later than June 9, 2011.
Trading in Subscription Rights
The subscription rights (ISIN DE000A1KRDK2) for the New Shares will be traded during the period
from May 27, 2011 up to and including June 7, 2011 on the regulated market (XETRA Frankfurt Specialist) of
the Frankfurt Stock Exchange. No application will be made for the subscription rights to be traded on any other
stock exchange. The subscription agent is prepared to broker the purchase and sale of subscription rights where
possible on the stock exchange. No compensation will be paid for unexercised subscription rights. Unexercised
subscription rights will expire and become invalid upon expiration of the subscription period. From May 27,
2011 onward, our existing shares will be quoted on the regulated market of the Frankfurt Stock Exchange
without subscription rights (ex Bezugsrecht).
Deutsche Bank Aktiengesellschaft may effect suitable transactions to provide liquidity for fair and
orderly trading in subscription rights through, for example, the purchase or sale of subscription rights to New
Shares. Deutsche Bank Aktiengesellschaft reserves the right to effect hedging transactions in our shares or
corresponding derivatives. However, it is not certain that an active market will develop on the Frankfurt Stock
Exchange during this time period and that during the period of trading of the subscription rights the market will
be sufficiently liquid. In accordance with German market practice, the price for the subscription rights will be
fixed only once per day. The market price for the subscription rights depends on, among other things, the
development of the share price of Klöckner & Co SE but may fluctuate more strongly than the share price.
41

Important Notice
The Joint Global Coordinators acting on behalf of the Underwriters may under certain circumstances
terminate the Underwriting Agreement or extend the period of the subscription offer. These circumstances
include material adverse changes in the financial condition or results of operations of Klöckner & Co SE and
its subsidiaries, to the extent that these are not disclosed in the prospectus, default of one or more Underwriters,
material restrictions on stock exchange trading or banking activities, the outbreak or escalation of hostilities, or
other catastrophes or crises that have or are expected to have material adverse effects on the financial markets.
The Underwriters’ obligations will also terminate if the capital increase is not registered with the commercial
register of the local court of Duisburg, Germany, by June 9, 2011, 12:00 p.m. Central European Summer Time,
and the Underwriters and Klöckner & Co SE are unable to reach an agreement as to a later deadline. The
Underwriters may also terminate the Underwriting Agreement if the New Shares are not admitted to trading on
the Frankfurt Stock Exchange by June 9, 2011 (inclusive). In the event that the Underwriting Agreement is
terminated after the capital increase has been registered with the commercial register, we and the Underwriters
can agree to extend the subscription offer.
If the Underwriting Agreement is terminated prior to the registration of the capital increase with
the commercial register, the subscription rights will expire. If this happens, the institutions brokering
subscription rights will not rescind any trading transactions with investors. Accordingly, investors who
have acquired subscription rights through trading would suffer a loss. However, if the Underwriters
terminate the Underwriting Agreement after the registration of the capital increase in the commercial
register, shareholders who have exercised their subscription rights will be entitled to acquire New Shares
at the subscription price.
If the Underwriters terminate the Underwriting Agreement after the completion of the subscription
period, which is possible until June 10, 2011, 10:00 a.m. (Central European Summer Time), the
termination would apply only to New Shares not subscribed for under the subscription offer. Purchase
agreements relating to the unsubscribed New Shares are therefore conditional upon there being no such
termination. To the extent that any New Shares have been sold prior to the cancellation of the crediting
of shares, persons selling those shares will bear the risk of being unable to meet their obligation to deliver
New Shares.
Certification and Delivery of the New Shares
The New Shares (ISIN DE000KC01000) will be made available to shareholders in the form of a global
share certificate deposited with Clearstream Banking AG, Mergenthalerallee 61, 65760 Eschborn, Germany.
Pursuant to the Company’s articles of association, shareholders are not entitled to receive individual share
certificates. Unless the subscription period is extended, the New Shares are expected to be made available by
credit to the collective securities account on June 10, 2011 for the New Shares subscribed in the subscription
offer and, following completion of the private placement, presumably on June 14, 2011, for the New Shares
acquired in the private placement.
Commissions Payable by Subscribers
The subscription of New Shares is subject to customary bank commissions payable to the depositary
banks.
Stock Exchange Trading in the New Shares
Application is expected to be made on May 30, 2011 for the admission of the New Shares to the regulated
market (regulierter Markt) of the Frankfurt Stock Exchange, with simultaneous admission to the sub-segment
of the regulated market with further post-admission obligations of the Frankfurt Stock Exchange (Prime
Standard). Trading is expected to commence on June 10, 2011 and we plan to have all of the New Shares
included in the existing quotation of the listed shares of Klöckner & Co SE (ISIN DE000KC01000) on the
Frankfurt Stock Exchange on June 10, 2011.
Placement of Unsubscribed Shares/Private Placement
The Underwriters will offer any remaining New Shares not subscribed for as part of the subscription offer
in a private placement to qualified investors in Germany and other countries, excluding Canada, Japan and
Australia, and in the United States to qualified institutional buyers as defined in Rule 144A under the U.S.
42

Securities Act of 1933, as amended (the “Securities Act”), in reliance on an exemption from the registration
requirements of the Securities Act.
Publication
The prospectus relating to the New Shares has been published on our website (http://www.kloeckner.de)
on May 26, 2011, and printed copies are available free of charge at customary business hours from Klöckner &
Co SE, Am Silberpalais 1, 47057 Duisburg, Germany, and from Deutsche Bank Aktiengesellschaft, Große
Gallusstraße 10-14, 60311 Frankfurt am Main, Germany, J.P. Morgan AG, Junghofstraße 14, 60331 Frankfurt
am Main, Germany, Deutsche Bank Luxembourg, S.A., 2 Boulevard Konrad Adenauer, L-1115 Luxembourg,
J.P. Morgan, 6 Route de Treves, Senningerberg, L-2633 Luxembourg, as well as from COMMERZBANK
Aktiengesellschaft, Kaiserstrasse 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany, HSBC Trinkaus &
Burkhardt AG, Königsallee 21/23, 40212 Düsseldorf, Germany, The Royal Bank of Scotland N.V. (London
Branch), 250 Bishopsgate, London EC2M 4AA, United Kingdom, and UniCredit Bank AG, Kardinal-
Faulhaber-Str. 1,80333 Munich, Germany.
Selling Restrictions
The New Shares and the subscription rights have not been and will not be registered under the Securities
Act or with the securities regulatory authorities of any state of the United States. The New Shares and the
subscription rights may not be offered, sold, or delivered directly or indirectly, in the United States, except in
reliance on available exemptions from the registration requirements under the Securities Act.
Stabilization
In connection with the offering of the New Shares, Deutsche Bank Aktiengesellschaft, acting as
stabilizing manager, may take measures to stabilize the trading or market price of our shares in order to
counterbalance any existing sales pressure (“Stabilization Measures”). Deutsche Bank Aktiengesellschaft is
not obligated to initiate Stabilization Measures. No assurance can therefore be given as to whether Stabilization
Measures will be taken at all. In the event that Stabilization Measures are initiated, they may be
terminated at any time without prior notice. Such Stabilization Measures may be commenced at any time
following the publication of the subscription offer and must be terminated no later than the 30 th calendar day
following the expiration of the subscription period, which is expected to be on or about July 8, 2011
(“Stabilization Period”). Stabilization Measures may result in a higher trading or market price for our shares
than would have been the case in the absence of such measures. In addition, Stabilization Measures may
temporarily result in a trading or market price at a level that is not sustainable. No measures will be taken to
stabilize the trading or market price of our shares above the subscription price for New Shares.
Within a week following the expiration of the Stabilization Period, a notice containing the following
information will be published in the Frankfurter Allgemeine Zeitung and on our website (www.kloeckner.de)
as to (i) whether Stabilization Measures were actually taken, (ii) the date on which a Stabilization Measure was
commenced, (iii) the date the last Stabilization Measure was taken and (iv) the price range within which
Stabilization Measures were taken. This information will be provided in respect of each date on which a
Stabilization Measure was taken.
Duisburg, in May 2011 Klöckner & Co SE
The Management Board
Lock-up
We have agreed with the Underwriters that, to the extent legally permissible, we will not, without the prior
consent of the Joint Global Coordinators, which may not be unreasonably withheld or delayed, for a period of six
months from the date of first trading of the New Shares, issue or, directly or indirectly, sell, offer, contract to sell, or
otherwise transfer or dispose of, pledge or create or grant another security interest in any of our shares, options on
such shares, or securities that can be converted into or exchanged for such shares or that carry rights to acquire such
shares. We also agreed not to announce any capital increase from authorized capital, or to initiate a capital increase
(except for purposes of issuing shares (i) to satisfy conversion rights of holders of Convertible Bonds issued by us,
(ii) based on a capital increase from our own funds, (iii) in connection with an acquisition or a joint venture to the
extent that the buyer assumes the aforementioned obligations), or to enter into other transactions (including with
respect to derivative instruments) the economic effect of which would be similar to that of the measures described
above.
43

Dilution
Any shareholder who does not exercise his subscription rights will have his shareholdings diluted by 33.33%.
The book value of the equity on our consolidated balance sheet according to IFRS net of minority interests as of
March 31, 2011, calculated on the basis of the 66,500,000 shares currently outstanding amounted to EUR 19.58 per
share. Assuming complete placement of the 33,250,000 New Shares from the capital increase at a subscription price
of EUR 15.85 and after deduction of the estimated offering expenses, our adjusted equity as of March 31, 2011 in
accordance with IFRS would amount to EUR 18.21 per share (calculated based on our interim consolidated
financial statements for the first quarter of 2011, as adjusted by the effects of the rights offering assuming that
99,750,000 shares will be outstanding after completion of the offering). This corresponds to a decrease of our equity
by EUR 1.37 or 7.0% per share for existing shareholders as a result of this offering and entails an immediate
increase in book value per share for the purchasers of the New Shares of EUR 2.36 or 14.9% per share, since our
adjusted equity per share exceeds the subscription price per share by this amount or percentage.
Offering Expenses and Net Proceeds of the Offering
The total expenses of the offering, including the Underwriters’ commissions, are expected to amount to approximately
EUR 12.5 million. We expect the net proceeds from the offering to be approximately EUR 514.5 million.
Selling Restriction Notices
The New Shares and the subscription rights have not been and will not be registered under the Securities Act,
or with the securities regulatory authorities of any state of the United States, and may not be offered or sold, or
delivered directly or indirectly in the United States, except pursuant to an exemption from the registration and
disclosure requirements under the Securities Act and in compliance with all other applicable U.S. regulations.
Pursuant to the underwriting agreement, the Underwriters have agreed (i) to refrain from offering or selling the New
Shares or subscription rights except in the United States to persons they reasonably believe to be qualified
institutional buyers in accordance with Rule 144A under the Securities Act, or in accordance with Rule 903 of
Regulation S under the Securities Act and (ii) that neither they, nor any third party acting on their behalf, have
undertaken or will undertake (x) “directed selling efforts” within the meaning of Regulation S under the Securities
Act or (y) “general advertising” or “general solicitation”, each within the meaning of Rule 502(c) of Regulation D
under the Securities Act, with regard to the New Shares and subscription rights in the United States. We do not
intend to register the offering or any portion thereof in the United States or to conduct a public offering of the
New Shares or subscription rights in the United States.
The Underwriters have also agreed in the underwriting agreement that they have not made and will not make
an offer of the New Shares and the subscription rights to the public in any member state of the European Economic
Area (EEA) that has implemented the Prospectus Directive (Directive 2003/71/EC) from the date of implementation
of the Prospectus Directive unless (i) a prospectus for the New Shares and the subscription rights that has been
approved by the competent authorities in the relevant member state or in another member state of the EEA that has
implemented the Prospectus Directive has been published in advance, and the competent authorities in the member
state in which the offering is taking place have been notified of this fact in compliance with the Prospectus
Directive; (ii) the offering is directed at legal entities that are licensed to perform financial market activities and are
subject to regulation or, if not so licensed or regulated, whose sole business purpose is to invest in securities; (iii) the
New Shares are offered to companies that meet at least two of the following three requirements according to their
most recent annual financial statements or consolidated financial statements: (x) an average of at least 250
employees during the last financial year; (y) a total balance sheet of more than EUR 43,000,000 and (z) net annual
revenue of more than EUR 50,000,000; or (iv) the offering is being conducted in circumstances which do not require
the publication of a prospectus by us pursuant to Article 3 of the Prospectus Directive.
44

Underwriters; Underwriting Agreement
On May 26, 2011, we and the Underwriters entered into an underwriting agreement with respect to the
subscription offer and the offering of the New Shares for which subscription rights were not exercised. In the
underwriting agreement, each Underwriter has severally agreed to subscribe for the number of New Shares listed
below and to offer these for subscription to the shareholders. We have agreed to issue the corresponding number of
New Shares.
Underwriter Address No. of New Shares
Deutsche Bank Aktiengesellschaft Große Gallusstraße 10-14,
60311 Frankfurt am Main,
Germany
J.P. Morgan Securities Ltd 125 London Wall,
London EC2Y 5AJ,
COMMERZBANK
Aktiengesellschaft
United Kingdom
Kaiserstrasse 16 (Kaiserplatz),
60311 Frankfurt am Main,
Germany
HSBC Trinkaus & Burkhardt AG Königsallee 21/23,
40212 Düsseldorf,
The Royal Bank of Scotland N.V.
(London Branch)
Germany
250 Bishopsgate,
London EC2M 4AA,
United Kingdom
UniCredit Bank AG Kardinal-Faulhaber-Str. 1,
80333 Munich,
Germany
13,300,000
13,300,000
1,662,500
1,662,500
1,662,500
1,662,500
New Shares not subscribed for in the subscription offer will be offered by the Underwriters to qualified
investors in private placements in Germany and other countries, excluding Canada, Japan, and Australia, and in the
United States to qualified institutional buyers in reliance on an exemption from the registration requirements of the
Securities Act.
Pursuant to the underwriting agreement, the Underwriters will pay us at least the subscription price for each
New Share for which subscription rights are not exercised by June 9, 2011.
Pursuant to the underwriting agreement, we are required to pay the Underwriters a commission of approximately
EUR 10.5 million (this amount includes a discretionary fee; we will decide whether to pay this fee at closing
of the offering) and to indemnify them against certain liabilities in connection with the offering. The underwriting
agreement also stipulates that the Underwriters’ obligations are contingent on the fulfillment of certain conditions,
such as the receipt of standard legal opinions satisfactory to the Underwriters.
For additional information on the termination of the underwriting agreement, see above ‘‘— Subscription
Offer — Important Notice”.
Other Legal Relationships between the Underwriters and the Company
Each of the Underwriters and/or certain of their affiliates is a financing bank for Klöckner’s existing credit
facilities and/or ABS programs and some of them perform currency hedging transactions for companies within the
Klöckner & Co Group and provide the companies of the Klöckner & Co Group with various commercial banking
accounts and services. Additionally, the Underwriters or their affiliates may from time to time enter into business
relationships with the Group to render services to it in the ordinary course of business. Ultimately, anyone who has a
business connection with the Klöckner & Co Group has a direct or indirect interest in the offering.
45

Form; Voting Rights
INFORMATION ABOUT THE NEW SHARES
Our shares, including the New Shares, are ordinary registered shares with no par value. Each New Share
represents a notional amount of the Company’s share capital of EUR 2.50. Each New Share (and each existing
share) carries one vote at the Company’s annual shareholders’ meeting and no shareholder has different voting
rights. There are no restrictions on voting rights.
For a detailed description of the Company’s share capital and shares, see “Description of Share Capital”.
Dividend Entitlement; Share of Liquidation Proceeds
The New Shares entitle holders to dividend rights as from January 1, 2011, which includes the full financial
year for 2011, and for all subsequent financial years.
If the Company is liquidated, the holders of the New Shares are entitled to the liquidation proceeds, if any, in
proportion to their holdings in the Company’s share capital.
Admission to Stock Exchange Trading; Certification; Delivery
Application for admission of the New Shares to the regulated market (regulierter Markt) of the Frankfurt Stock
Exchange and to the sub-segment of the regulated market with further post-admission obligations of the Frankfurt
Stock Exchange (Prime Standard), is expected to be made on May 30, 2011 with trading expected to begin on or
about June 10, 2011. The New Shares are expected to be included in the existing price quotation for our shares on or
about June 10, 2011.
The New Shares will be delivered to the subscribers in the form of co-ownership rights in a global share
certificate to be deposited with the collective securities depositary Clearstream Banking AG, Mergenthalerallee 61,
65760 Eschborn, Germany. The New Shares subscribed for in the subscription offer are expected to be delivered on
or about June 10, 2011, and the New Shares purchased in the private placement are expected to be delivered after
completion of the private placement, on or after June 14, 2011, through the book-entry facilities of Clearstream
Banking AG. According to the Company’s articles of association, shareholders are not entitled to receive individual
share certificates.
ISIN; WKN; Common Code; Trading Symbol
International Securities Identification Number (ISIN)
for the existing and the New Shares: DE000KC01000
for the subscription rights to the New Shares: DE000A1KRDK2
German Securities Identification Code (WKN)
for the existing and the New Shares: KC0100
for the subscription rights to the New Shares: A1K RDK
Common Code 025808576
Trading symbol KCO
Transferability; Prohibitions on Disposal
The New Shares are freely transferable in accordance with the legal provisions applicable to our registered
shares. Except for the restrictions listed in “The Offering — Selling Restrictions”, there are no other legal
restrictions on trading in the New Shares. The owner of our registered shares must be recorded in our share
register. Only those persons who are recorded in our share register as the owners will be treated by us as
shareholders and will be entitled to enforce their rights under the shares.
46

Notices; Paying and Registration Agent
According to its articles of association, the Company’s notices are published in the electronic version of the
German Federal Gazette (Bundesanzeiger). Notices relating to the Company’s shares are also published in the
electronic version of the German Federal Gazette and, to the extent required by law, in an official national journal
accredited by the Frankfurt Stock Exchange (überregionales Börsenpflichtblatt).
The paying and registration agent for our shares is Deutsche Bank Aktiengesellschaft, Große
Gallusstrasse 10-14, 60311 Frankfurt am Main, Germany.
Designated Sponsors
Deutsche Bank Aktiengesellschaft
J.P. Morgan Securities Ltd.
47

REASONS FOR THE OFFERING AND USE OF PROCEEDS
We estimate that the proceeds from the offering, net of underwriting fees and other offering expenses, will be
approximately EUR 514.5 million. We intend to use the net proceeds of the offering, together with our current cash
and future cash flow from operations, primarily to continue to pursue investment opportunities for our business, and
for general corporate purposes. We expect investment opportunities to include acquisitions of other metal
distributors and steel service centers, with the goal of expanding our customer base and regional product portfolios
in existing and new markets. Consistent with our strategy, these acquisitions could be significant. With the proceeds
from the offering we aim to keep our net indebtedness and our equity ratio at a level we consider to be appropriate.
48

CAPITALIZATION AND INDEBTEDNESS, WORKING CAPITAL
The following tables illustrate our capitalization as of March 31, 2011. These tables should be read in
conjunction with the Company’s unaudited consolidated interim financial statements as of and for the three months
ended March 31, 2011 and the accompanying notes (see “Financial Information — Unaudited Consolidated
Interim Financial Statements of Klöckner & Co SE for the First Quarter of 2011 (IFRS)” beginning on page F-2).
Capitalization
March 31, 2011
(prior to completion
of the offering)
(EUR millions)
(unaudited)
Long-term financial liabilities .............................................. 1,097.1
— Thereof: secured by Klöckner & Co ..................................... 190.2
— Thereof: secured by third parties ........................................ 0.0
— Thereof: unsecured .................................................. 906.9
Short-term financial liabilities .............................................. 45.9
— Thereof: secured by Klöckner & Co ..................................... 13.8
— Thereof: secured by third parties ........................................ 0.0
— Thereof: unsecured .................................................. 32.1
Financial liabilities . ..................................................... 1,143.0
Group equity Subscribed capital ............................................ 166.3
Capital reserves . . . ..................................................... 464.2
Retained earnings . . ..................................................... 639.6
Accumulated other comprehensive income (loss) ................................ 32.3
Total equity (excluding minority interests) ..................................... 1,302.4
Minority interests . . ..................................................... 15.8
Capitalization (total) ..................................................... 2,461.2
Number of Company shares (in millions) ...................................... 66.5
Net Financial Debt . ..................................................... 227.3
Upon completion of the offering our subscribed capital will increase by EUR 83.1 million, capital reserves by
EUR 431.4 million and total equity by EUR 514.5 million; the number of outstanding shares will be 99,750,000 and
our capitalization will amount to EUR 2,975.7 million.
Net Financial Debt
March 31, 2011
(prior to completion
of the offering)
(EUR millions)
(unaudited)
Cash ................................................................. 218.7
Cash equivalents . . . ..................................................... 709.2
Trading securities . . ..................................................... 0.0
Liquidity ............................................................. 927.9
Current financial receivable .............................................. —
Current capital market liabilities ............................................ 9.3
Current liabilities to banks ................................................ 30.6
Other current financial liabilities ............................................ 6.0
Current financial liabilities ............................................... 45.9
Net current financial debt ................................................ (882.0)
Non current capital market liabilities ......................................... 534.3
Non current liabilities to banks ............................................. 258.0
Other non current financial liabilities ......................................... 304.8
Non current financial liabilities ............................................ 1,097.1
Transaction costs. . . ..................................................... 12.2
Net financial debt ...................................................... 227.3
49

As a result of the offering net of the estimated transaction costs in connection therewith, our cash and cash
equivalents and securities will increase by approximately EUR 514.5 million and our net financial debt will
decrease by the same amount.
Contingent and Indirect Liabilities
The Klöckner & Co Group has undertaken commitments in connection with agreements that are classified as
nonredeemable operating leases. Future payments arising from these lease agreements as of March 31, 2011 are
shown below:
Under 1 year 1-5 years
More than
5 years March 31, 2011
(in millions of EUR)
Operating leases ....................... 52.3 112.0 55.0 219.3
Payments in connection with leases will be charged to the income for the corresponding year; as provided by
IFRS future liabilities in connection with operating leases are not shown in the balance sheet. In addition, the
Klöckner & Co Group also had additional financial obligations of EUR 2.7 million arising from purchase
obligations for investments.
There are no other material contingent liabilities.
Statement on Working Capital
In our opinion, our working capital is sufficient for our present requirements, i.e. for the next twelve months
from the date of this prospectus.
50

EARNINGS PER SHARE AND DIVIDEND POLICY
The New Shares entitle holders to dividends as from January 1, 2011 and for all of our subsequent financial
years. The consolidated earnings per share in accordance with IFRS and the dividends paid by us for the financial
years 2008, 2009 and 2010 are listed below. The earnings per share were calculated with each share representing a
notional amount of our issued share capital of EUR 2.50.
Net income
attributable to our
shareholders
according to our
consolidated
financial
statements (IFRS)
Net income
according to the
consolidated
financial
statements of
the Company
(IFRS)*
Net income
according to
the annual
financial
statements of
the Company
(HGB)
Total dividend
distributed for
the respective
financial year
Dividend per
share for the
respective
financial year
(per share in EUR) (EUR millions) (EUR millions) (EUR millions) (per share in EUR)
2008 ............. 8.56 384.2 17.7 — —
2009 ............. (3.61) (185.7) 31.2 — —
2010 ............. 1.17 80.2 47.4 20.0 0.30
* Amounts for 2008 restated due to the initial application of IFRS 14.
The dividend for the previous financial year is proposed by our management board and our supervisory board
and approved for payment by the shareholders at our shareholders’ meeting of the following year. Dividends
approved at the shareholders’ meeting are payable on the first business day following the shareholders’ meeting,
provided that the dividend resolution does not stipulate otherwise. Under German law, claims for dividends
generally become time-barred after three years. The limitations period commences at the end of the year in which
the eligible shareholder knows or, barring gross negligence on his part, should have known of the facts giving rise to
the dividend claim. If the dividend claim is represented by a dividend coupon, such claim will lapse if the dividend
coupon is not presented within four years following the year in which the dividends were initially payable. If it is
presented, the claim will lapse two years following the expiration of the period allowed for presentation. If the claim
for dividend payment has become time-barred, the Company is entitled to, but not obliged to, satisfy such claim.
Detailed information about the dividends is published in the electronic version of the German Federal Gazette
(Bundesanzeiger) and in at least one official national journal accredited by the Frankfurt Stock Exchange
(überregionales Börsenpflichtblatt). Dividends may only be paid from the Company’s net earnings (Bilanzgewinn)
recorded in its annual unconsolidated financial statements, which are prepared in accordance with HGB, as opposed
to our consolidated financial statements, which are prepared in accordance with IFRS. The accounting principles of
HGB and IFRS differ in certain respects. Because the Company functions as a holding company, net earnings are
also affected by subsidiaries’ dividend distributions. When calculating net earnings available for distribution, the
net income for the period (Periodenergebnis) must be adjusted to account for profit/loss carry-forwards from the
prior financial year and for withdrawals from or allocations to reserves. German law requires certain reserves to be
established, and such reserves must be deducted in calculating net earnings available for distribution. Certain
additional limitations apply if self-created intangible assets or deferred tax assets have been capitalized. Capital
gains tax of 25% plus a 5.5% solidarity surcharge on the capital gains tax is withheld from the dividends paid. See
“Taxation in Germany —Taxation of Shareholders”.
In the light of the crisis in the global financial markets and its negative impact on our business and to preserve
our capital, we paid no dividend in relation to the 2008 and 2009 fiscal years. For the 2010 fiscal year, the
shareholders’ meeting on May 20, 2011 resolved the payment of a dividend of EUR 0.30 per share that was paid on
May 23, 2011. We intend to pay dividends in the future depending on the earnings situation. Our historic dividend
policy was to distribute 30% of consolidated net profit adjusted for extraordinary effects. However, our ability to
pay dividends in future years will depend on the amount of distributable net earnings that are available. We can
provide no assurance regarding the amounts of future net earnings, if any, and consequently, we can provide no
assurance that we will pay dividends in future years. Moreover, dividends paid in prior years may not be indicative
of the amounts of future dividend payments. See also “Risk Factors — Risks Related to Our Business — Klöckner &
Co SE is a holding company and dependent on dividend payments from its subsidiaries, affecting its own ability to
pay dividends”.
51

SELECTED CONSOLIDATED FINANCIAL AND OTHER OPERATING DATA
The following tables summarize selected historical consolidated financial information for Klöckner & Co SE
as of and for the years ended December 31, 2008, 2009 and 2010 and the three month periods ended March 31, 2010
and 2011, all in accordance with IFRS. The summary historical consolidated financial information for the years
ended December 31, 2008, 2009 and 2010 has been derived from Klöckner & Co SE’s audited consolidated
financial statements for such periods, which have been audited by KPMG Hartkopf + Rentrop Treuhand KG
Wirtschaftsprüfungsgesellschaft, Cologne, Germany (for the financial years ended December 31, 2008 and 2009),
and KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, Germany (for the financial year ended December 31,
2010), and the summary historical consolidated financial information for the three month periods ended March 31,
2010 and 2011 has been derived from Klöckner & Co SE’s unaudited interim consolidated financial statements for
such periods. In our consolidated financial statements for the year ended December 31, 2009, certain comparison
amounts relating to the income statement for the year ended December 31, 2008 have been amended from the
amounts reported in the relevant historical consolidated financial statements due to the initial application of
IFRIC 14. IFRIC 14 provides general guidance on how to assess the limit IAS 19 places on the amount of the surplus
of a pension plan that can be recognized as an asset. In the tables below, amounts derived from the consolidated
income statement and balance sheet data for the years 2008 and 2009 include such adjusted numbers.
Three months ended
Years ended December 31,
March 31
2008 2009 2010 2010 2011
(unaudited)
(in thousands of EUR)
(unaudited)
Selected data from the consolidated income
statement
Sales ............................... 6,749,595 3,860,493 5,198,181 1,048,841 1,586,799
Other operating income ................. 371,182 127,359 35,822 8,028 8,475
Change in inventory (1)
.................. 10,832 (8,661) (7,383) (698) 7,342
Own work capitalized ................... 73 10 39 5 —
Cost of materials ...................... (5,394,417) (3,206,830) (4,054,830) (812,538) (1,241,008)
Personnel expenses ..................... (546,017) (441,184) (486,618) (111,180) (131,520)
Depreciation, amortization and impairments . . (67,372) (109,638) (85,783) (18,393) (18,653)
thereof impairment losses .............. — (41,782) — — —
Other operating expenses ................ (590,612) (399,684) (447,442) (103,372) (125,589)
Operating result ...................... 533,264 (178,135) 151,986 10,693 85,846
Income from investments ................ — 2 5 — —
Financial result ....................... (69,782) (61,699) (67,650) (15,156) (19,350)
Income before taxes ................... 463,482 (239,832) 84,341 (4,463) 66,496
Income taxes ......................... (79,308) 54,168 (4,129) 6,194 (22,350)
Net income attributable to minority interests . .
Net income attributable to Klöckner & Co SE
(14,161) 2,820 2,671 565 684
shareholders ........................ 398,335 (188,484) 77,541 1,166 43,462
Net income .......................... 384,174 (185,664) 80,212 1,731 44,146
52

Three months ended
Years ended December 31,
March 31
2008 2009 2010 2010 2011
(unaudited)
(in thousands of EUR)
(unaudited)
Selected data from the consolidated balance
sheets
Non-current assets ....................
Of which
811,727 711,916 855,961 859,633 806,859
Intangible assets ..................... 235,931 194,985 227,323 244,053 210,797
Property, plant and equipment. .......... 479,421 426,151 524,169 506,279 507,376
Current assets. .......................
Of which
2,272,041 2,000,846 2,635,134 2,181,046 2,973,352
Inventories ......................... 1,000,612 570,918 898,841 798,354 1,043,235
Trade receivables .................... 798,618 464,266 703,101 689,512 924,641
Cash and cash equivalents (2) ............ 296,636 826,517 934,955 614,559 927,931
Total assets .......................... 3,083,768 2,712,762 3,491,095 3,040,679 3,780,211
Equity (including minority interests) ...... 1,081,352 1,123,263 1,290,494 1,137,412 1,318,158
Non-current liabilities ..................
Of which
Provisions for pensions and similar
1,176,576 926,758 1,361,392 1,001,346 1,406,748
obligations .......................
Other provisions (including deferred tax
180,095 174,598 174,442 177,143 173,486
liabilities) ........................ 123,797 102,316 111,423 103,538 101,459
Financial liabilities ................... 813,000 618,744 1,020,582 668,448 1,097,112
Current liabilities .....................
Of which
825,840 662,741 839,209 901,921 1,055,305
Other provisions ..................... 284,766 109,868 107,259 107,588 101,928
Financial liabilities ................... 48,112 52,169 39,578 90,776 45,935
Other liabilities ..................... 81,640 51,650 76,120 60,347 78,951
Trade payables ...................... 392,183 398,387 584,614 620,038 804,704
Total equity and liabilities .............. 3,083,768 2,712,762 3,491,095 3,040,679 3,780,211
Selected data from the consolidated cash flow
statement
Cash flow from operating activities . . . ...... 186,884 564,662 35,188 (60,366) (69,370)
Cash flow from investing activities . . . ...... 72,090 (8,032) (187,748) (127,313) (5,318)
Cash flow from financing activities . . . ...... (123,439) (23,848) 251,974 (26,196) 70,616
Changes in cash and cash equivalents ..... 135,535 532,782 99,414 (213,875) (4,072)
Other selected financial data and business
information (unaudited)
Tons shipped (in thousands of tons) . . ...... 5,974 4,119 5,314 1,180 1,498
Gross profit (3) ......................... 1,366,083 645,012 1,136,007 235,610 353,133
EBITDA (4) (5) ......................... 600,636 (68,495) 237,774 29,086 104,499
EBITDA, adjusted (6) .................... 406,491 — — — —
Basic earnings per Share (IFRS) in EUR ..... 8.56 (3.61) 1.17 0.02 0.65
Capital expenditures (7) .................. 48,111 25,023 26,976 3,966 6,011
Total financial liabilities ................. 861,112 670,913 1,060,160 759,224 1,143,047
Financing costs ....................... 6,312 5,977 11,669 5,263 12,186
Total debt (8) .......................... 867,424 676,890 1,071,829 764,487 1,155,233
Net financial debt (9) .................... 570,788 (149,627) 136,874 149,928 227,302
53

(1) Change in inventory represents the difference in the amount of work in progress and finished goods at period end compared to the
beginning of the period, adjusted for currency effects. Most of our inventory consists of merchandise, changes of which are not reflected in
this item, but included in cost of materials.
(2) Cash and cash equivalents include cash, cash equivalents and marketable securities and, for the year ended December 31, 2008,
EUR 3.105 million in restricted cash.
(3) Gross profit represents sales plus change in inventories and capitalized expenses for own work, less cost of materials.
(4) EBITDA represents net income plus financial result, income taxes, depreciation and amortization and impairment losses for the relevant
period. EBITDA is not a recognized term under IFRS and does not purport to be an alternative to data from the income or cash flow
statement prepared in accordance with IFRS. We are not presenting EBITDA here as a measure of our operating results. Our management
believes that the presentation of EBITDA is helpful to investors as a measure of our ability to generate cash and to service debt. However,
you should not construe EBITDA as an alternative to net income determined in accordance with IFRS or to cash flows from operating
activities, investing activities or financing activities as a measure of cash flows. In particular, an increase in EBITDA may be accompanied
by increased working capital requirements, whereas a decreased EBITDA may be accompanied by a working capital release. However,
there is no uniform definition of EBITDA, which means that EBITDA shown by other companies may not necessarily be comparable with
EBITDA of the Klöckner & Co Group.
(5) The following calculation shows a reconciliation of net income to EBITDA:
Years ended December 31,
Three months ended
March 31
2008 2009 2010 2010 2011
(unaudited)
(in thousands of EUR)
(unaudited)
Net income . .................................... 384,174 (185,664) 80,212 1,731 44,146
Income taxes . . . ............................... 79,308 (54,168) 4,129 (6,194) 22,350
Financial result . . ...............................
Amortization on intangible assets and depreciation of property,
69,782 61,699 67,650 15,156 19,350
plant and equipment and impairment losses thereon . . ...... 67,372 109,638 85,783 18,393 18,653
EBITDA ....................................... 600,636 (68,495) 237,774 29,086 104,499
(6) EBITDA, adjusted, for the year ended December 31, 2008, excludes gains of approximately EUR 273.4 million from divestitures in 2008,
and adds back the net effect of EUR 79.3 million in 2008 of the French antitrust fine discussed under “Legal Proceedings —Fine Imposed
and Additional Investigations by the French Competition Authority”.
(7) Capital expenditures represent payments for intangible assets, property, plant and equipment.
(8) Total debt before deduction of financing costs.
(9) Net financial debt represents current and non-current financial liabilities before deduction of financing costs less cash and cash
equivalents.
54

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You should read the following discussion and analysis together with our Group financial statements, including
the notes, included elsewhere in this prospectus. Certain information contained in the discussion and analysis set
forth below and elsewhere in this prospectus includes forward looking statements that involve risk and uncertainties.
See “General Information — Forward-Looking Statements”, “Risk Factors”, “Business” and the notes to
our consolidated financial statements included elsewhere in this prospectus for a discussion of important factors
that could cause actual results to differ materially from the results described in or implied by the forward looking
statements contained in this prospectus.
Introduction
Overview of business activity
We are the largest producer-independent steel and metal distributor in the combined European and
North American markets measured by sales (source: Eurometal and our market data aggregation based on
2010 sales). In Europe, we are among the three largest warehousing multi-metal distributors measured by sales,
including competitors that are controlled by steel or metal producers (source: Eurometal). In the United States,
measured by sales, we believe that we are among the leading distributors of heavy carbon steel, our main focus in
this market, and the tenth-largest warehousing multi-metal distributor overall. After giving effect to the acquisition
of Macsteel, one of the leading service center companies in the United States, we believe we are the third-largest
multi-metal distributor and steel service center in the United States. We operated from 246 distribution locations in
15 countries throughout Europe and North America and had 9,699 employees as of December 31, 2010. Through
our recent acquisitions, we have increased our steel service center activities focused on the automotive, and
engineering sectors, thereby increasing our value added services with higher margin potential. Moreover, steel
service centers include customers that enter into longer term master agreements providing for more stability in our
business.
Our main business is the distribution of steel products including service center activities (78.1% of total sales
in 2010) and aluminum products (7.2% of total sales in 2010). We act as a link between producers and
manufacturing customers and our position as a producer-independent supplier allows our customers to benefit
from centrally coordinated purchases and from our broad local and global procurement capabilities. We purchase a
range of steel and aluminum products from the producers in bulk, warehouse these products and sell and deliver
them in smaller lots in accordance with our customers’ needs. We offer various value-added services, including
cutting-to-length services, plasma cutting, shot-blasting, priming and bending, in particular through our increasing
steel service center activities. In a number of our markets, we also distribute products other than steel and
aluminum, such as non-ferrous metals and tools and industrial hardware, which in aggregate represented 14.7% of
our total sales in 2010. We sell most of our products through our distribution locations. To a limited extent, we also
arrange for direct sales, which involve direct shipment of products from the metal producer to our customers. Direct
shipping accounted for approximately 10.8% of our sales in 2010. We usually buy and sell steel and other metals at
market prices and have historically been able to pass on changes in market prices to our customers. Our sales are for
the most part done on a spot basis and when we enter into long-term fixed price supply contracts with producers, we
generally have corresponding sales commitments and do not engage in speculative trading.
We have more than 170,000 active customers who have purchased from us during 2010. None of our customers
accounted for more than 1.5% of our total sales in 2010. Our customers are mainly small and medium-sized steel
consumers (and some larger customers in our steel service center business) in diverse industry sectors, such as
construction, industrial machinery and equipment, on-sellers, appliances/durable goods manufacturers and
automotive.
Material factors affecting results of operations
We believe that the factors discussed below are principal factors materially affecting our results of operations.
Demand
Demand for our products is driven by the general level of economic activity, particularly in the industries and
markets we serve. As the consumption of steel generally increases when the economy grows and decreases when the
economy declines, the development of gross domestic product, and especially industrial production, is to a certain
extent an indicator for future demand in steel. With regard to our customers, the main drivers of demand for our
products are our three largest customer groups, the construction and the industrial machinery and equipment
55

industries as well as automotives. While we have experienced increased demand for industrial machinery and
equipment as well as automotives in 2010, the construction industry remains weak.
In addition, demand is influenced by our customers’ expectations in respect of future price and economic
developments. For example, in times such as the economic crisis in 2008 and 2009, our customers tend to reduce
their stock levels, thereby further reducing demand below the already depressed levels. Conversely, in times of
improved economic activity and rising prices such as in the fiscal year 2010, customers increase stock levels in
anticipation of further price increases and/or increasing business activities, thereby further increasing demand for
our products. Sales volumes can therefore show strong fluctuations from year to year and from quarter to quarter.
Metal prices
The prices that we pay for metals, and hence the prices we are able to charge our customers, depend on a variety
of factors. These factors include general economic conditions, costs of raw materials and energy for metal
producers, production levels, competition, transportation costs, import duties and other trade restrictions, currency
fluctuations and other factors, and are subject to significant fluctuations. Prices for the main raw materials used in
steel production, coking coal, iron ore and scrap metal, are heavily influenced by overall demand for steel, and
limitations in the supply of these raw materials resulted in significant price increases in recent years. The ability of
steel producers to pass on increases in prices of raw materials and other prices depends on the balance of supply and
demand, and in particular on the existence of capacity restrictions and overcapacities at different times in the steel
cycle.
Price fluctuations can affect operating results, gross profit (sales plus change in inventory and other own work
capitalized, less cost of materials), EBITDA, net working capital and cash flows. We buy and sell steel and other
metals at spot market prices. When we realize sales, our gross profit is calculated based on cost of materials that are
determined by using the weighted average cost method for the respective inventory sold. When metal prices change,
we will record a gain or a loss, as the price realized in sales will no longer match our weighted costs due to the time
lag between the purchase of inventory and the sale of products. While the time lag varies from product to product
and depends also on economic circumstances, the average time between products entering our inventory and the
time of sale was between one and three months in the last three years. At the end of each reporting period, we value
our inventory at the lower of weighted costs or net realizable value. These valuation adjustments also have an effect
on our gross margin. Metal price changes may affect both our profitability and our cash flow:
Steel price decreases, such as those which occurred at the end of 2008 and throughout most of 2009, lead to
losses. Steel price decreases, however, over time also lead to a decrease in the weighted average cost of
inventories, as new steel volumes are purchased at lower prices, and lead to a decrease in the amount of trade
receivables. As a result, while profitability is reduced through losses, the impact of the reduced profitability on
operating cash flow is mitigated as cash is released from working capital. Our business therefore provides
some stability of cash-flows at times of falling prices, which may be accompanied by declining volumes
contributing negatively to profits but (subject to time lag effects) positively to reduced working capital needs.
Under such circumstances, we are able to generate significant cash from working capital reduction, both from
the price and the volume effect, to reduce our net debt position and adjust our balance sheet to a lower
profitability environment.
Conversely, steel price increases such as those which occurred in 2010 and the first quarter of 2011 lead to
profits as inventories that were purchased at a lower price can then be sold at a higher price. Steel price
increases, however, also lead to an increase in the weighted average cost of inventories which results in an
increase in the value of inventories and in the amount of trade receivables, both resulting in rising working
capital needs. Further working capital needs may arise from rising steel volumes sold which require a larger
stock while operational profits would also increase. Our business similarly provides certain stability to cashflows
and leverage in an environment of increasing steel prices, as the increased cash-flow from higher
profitability supports the funding of the rising working capital requirements.
The following factors in particular can exacerbate or mitigate the effects of changes in inventory: inventory
volume changes within a price cycle, rate of inventory turnover, timing of a price cycle (including significant price
fluctuations within a very short period such as the dramatic price decline since late 2008), the ability to pass on price
changes to suppliers and customers, and the supply and demand behavior of suppliers and customers (including
artificial supply scarcity caused by suppliers, stocking of excessive inventory or systematic destocking by
customers in anticipation of further price changes).
Price changes primarily influence profitability because operating results and EBITDA move in line with
inventories. For the reasons described above, the same price changes can also affect working capital through
56

changes in inventories and the value of trade receivables and payables, all of which can also significantly affect cash
flow and net financial debt. In general, however, the effect of market changes on our cash flow historically has been
less significant than their impact on our profitability.
Acquisitions and divestures
One of the pillars of our growth strategy has been the making of targeted acquisitions while also divesting noncore
assets. As a result, during the period from 2008 through 2010, there have been several changes in the
composition of the consolidated entities of the Klöckner & Co Group. During the period, we completed a total of
7 acquisitions (2008: 3; 2009: 0, 2010: 4), the most significant of which were the purchases of the distribution
business of Becker Stahl in 2010, followed by Taylor Equipment and Machine Tool Corporation (business name:
Temtco Steel) in May 2008. In addition, during the same period we have, in several steps, increased our
shareholdings in our subsidiaries Debrunner Koenig Holding AG in Switzerland from 60% to 100% and Metalsnab
Holding AD in Bulgaria from 7.3% to 99.75%. We also divested non-core businesses such as our business in
Canada, Namasco Ltd. (completed in July 2008), and the fastening systems business in Switzerland, Koenig
Verbindungstechnik AG group (completed in September 2008). To date in 2011, we have consummated two further
acquisitions; see “Business —The Acquisition of Macsteel” and “—The Acquisition of Frefer”.
In 2010 we closed the acquisition of Becker Stahl, Bläsi AG, Angeles Welding & Mfg., Inc. and Lake Steel Ltd.
In Germany, Becker Stahl operates what we believe is one of the largest and most modern steel service centers in the
world. With the acquisition of Becker Stahl, we reinforced our market position in Germany and Western Europe,
added to our range of products and services, and improved the sector mix of customer groups we supply as this
acquisition added to our sales to the automotive industry in particular. In the fiscal year 2010, Becker Stahl contributed
EUR 517.0 million to our sales. In January 2010, via our Swiss subsidiary, Debrunner Koenig Holding AG, we
acquired the distributor Bläsi AG in Berne. With this acquisition, our Swiss subsidiary expanded its market position in
the water supply and building technology segment, and for the first time covers the Berne region with this product
portfolio. In August 2010, the operations of Angeles Welding & Mfg., Inc. (Angeles Welding) and its subsidiary Get
Steel, Inc. were acquired by our U.S. subsidiary Namasco Corp. through an asset acquisition. Angeles Welding
operates in the sectors of metal processing, precision parts, and steel service centers. On December 15, 2010 we
acquired the distributor Lake Steel Ltd. in Amarillo, Texas (USA) also via Namasco Corp. With the acquisition of
Lake Steel Ltd., Namasco extends its operations in northern Texas (USA). With two locations and around
100 employees, Lake Steel Ltd. also supplies customers in the surrounding states of New Mexico, Oklahoma,
Colorado, Arkansas, Kansas and Louisiana. Sales amounted to approximately EUR 35 million in 2010. Lake Steel
Ltd. has been included in the scope of consolidation since December 15, 2010.
The following table shows our acquisitions in the years 2008, 2009 and 2010.
Business acquired
Date of initial
consolidation
Lake Steel Ltd. ....................................................... December 15, 2010
Angeles Welding, Inc .................................................. August 18, 2010
BläsiAG............................................................ January 1, 2010
Becker Stahl-Service Group (Becker Stahl) .................................. March 1, 2010
Taylor Equipment and Machine Tool Corporation (Temtco Steel) .................. May5,2008
Multitubes Limited .................................................... January 1, 2008
Metalsnab Holding AD ................................................. January 1, 2008
The aggregate purchase price for our acquisitions in 2008 amounted to EUR 137.6 million (including the
increase of our shareholding in Metalsnab Holding AD from 7.3% to 99.75% but excluding the increase in our
shareholding in Debrunner Koenig, which was already consolidated), of which the acquisition of Temtco Steel
accounted for EUR 122.4 million. The aggregate purchase price for Becker Stahl amounted to EUR 153.8 million.
The aggregate purchase price for the remaining acquisitions in 2010 (Lake Steel, Angeles Welding and Bläsi)
amounted to EUR 61.7 million.
In the year of their acquisition, newly consolidated companies (including Klöckner Metalsnab AD in
2008) contributed to our sales EUR 197.4 million in 2008 (Temtco Steel: EUR 149.8 million thereof), EUR 0 million
in 2009 and EUR 551.4 million in 2010 (Becker Stahl: EUR 517.0 million thereof, the remaining acquisitions
(Bläsi, Angeles Welding, Lake Steel) EUR 34.4 million), respectively. In addition, we have further increased our
shareholdings in our consolidated subsidiary Debrunner Koenig Holding AG in Switzerland (from 60% to 100%) in
several steps during 2007 and 2008.
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The following table shows our divestitures in the years 2008, 2009 and 2010.
Business divested
Date of
deconsolidation
Klöckner Information Services GmbH ....................................... August 19, 2009
Koenig Verbindungstechnik AG group ....................................... September 4, 2008
Namasco Limited ...................................................... July 8, 2008
The disposals in 2008 resulted in gains of approximately EUR 273.4 million which are largely attributable to
the sale of Koenig Verbindungstechnik AG group. This disposal also included two subsidiaries which Koenig
Verbindungstechnik AG had acquired in 2007 and 2008. The disposal of Klöckner Information Services GmbH in
2009 resulted in a gain of EUR 2.5 million recorded in other operating income.
Business optimization and working capital management
For a global distributor such as Klöckner & Co, optimized, harmonized processes are a decisive success factor
and a way of differentiating ourselves from the competition. In 2005, we began implementing a program seeking
improvements in our profitability by optimizing purchasing, distribution network and working capital management.
As part of the program, we have restructured many of our distribution locations, closing or selling underperforming
distribution locations, and have sold non-core assets, including non-core activities in Canada, The Netherlands and
Switzerland. In addition, we disposed of properties no longer used. With the exception of the restructuring of our
German business in 2006, which resulted in the closure of three underperforming distribution locations, the
continuous business optimization consisted of numerous small steps, none of which have required significant
restructuring expenses. We have continued to identify and exploit further opportunities to reduce costs and improve
operating profitability in the years 2009 and 2010 and will do so in the future as part of our new Klöckner & Co 2020
strategy.
As a result, we continue to place a high priority on our efforts to optimize procurement, our logistics network,
and IT going forward. We have established a new department, “Operations Europe”, to coordinate and monitor
harmonization of our various operations on a global basis. We are continuously improving our purchasing
processes. In particular, we have leveraged experiences and imported best practices of other industries, such as
the automotive sector, for our own sourcing strategy. We have centralized most of our purchasing at a regional level
in Europe and North America. By aggregating demand in Europe on a cross-border basis and by reducing the
number of suppliers, we have successfully been able to negotiate improved pricing, payment terms and call off
schedules for deliveries with our major suppliers. The aggregation of purchasing volumes across borders in Europe
has improved our negotiating position and, as a result, we were able to negotiate payment terms of 60 days with our
key suppliers in most countries.
Inventory management is a key determinant of cash flow and profitability in the steel and metal distribution
business. The shorter the period between procurement and cash collection, the less capital is tied up in inventory. We
maintain our inventories in a network of distribution locations that are operated as central, regional and specialty
warehouse facilities. The structural configuration of these distribution locations is driven by regional and local
demand. Inventories at all locations are regularly monitored both to optimize inventory flow and to identify slow
moving products. Such products may then be eliminated from the product range if efficiency cannot be improved
through the use of specialty warehouse facilities. This is the basis to achieve rapid inventory turnover of products
carried, which in turn results in cost-efficient warehousing logistics and reduced inventory risks. While turnover
rates vary significantly between products and regions, our goal is, depending on lead times and actual market
conditions, to achieve an average turnover cycle of 70 to 80 calendar days for our inventories. In 2010, our average
turnover rate was 79 days.
Payment targets for customers vary according to local business practice between, typically, 30 days in
Germany and 120 days in Spain, resulting in average credit to customers of 40 to 50 calendar days in 2010. We have
historically experienced very low default rates on our trade receivables as approximately 64% of our trade
receivables were credit-insured.
Our fixed cost basis is dominated by personnel costs and other costs of our network of distribution locations.
Mix of products and services
Different product lines and local markets have different margins depending on factors such as general
availability of the product and competition in the specific local market. We offer our customers value-added
services in addition to pure distribution services. We sell products to customers from warehouse inventories and, if
requested, customize or process those products to meet specific customer needs, which may affect profitability as
58

value added services including flatroll service center products offer higher margins. We also arrange for direct sales,
which involve direct shipment of products from the metal producer to our customers and typically generate lower
margins than our warehousing distribution business. Direct shipping accounted for approximately 10.8% of our
sales in 2010.
Exchange rate fluctuations
The international nature of our business means that certain of our subsidiaries conduct their business in
currencies other than the euro. In 2010, 41.6% of total sales were generated by subsidiaries whose functional
currency is not the euro. Currency fluctuations generally have only a limited cash impact on our consolidated
financial result as those subsidiaries also incur most of their costs and obligations in the local currencies due to the
local nature of their operations. Exchange rate fluctuations, however, do expose us to translation risks, as all noneuro
financial results of Group companies must be translated into euro when preparing our consolidated financial
statements.
Seasonality
Our sales, profits and net financial debt have historically fluctuated significantly from one quarter to the next,
depending on the number of working days, weather conditions and vacation periods. We therefore assume that
quarterly financial debt levels will continue to fluctuate significantly. For example, our volumes are generally lower
in the winter months of January and February than in the spring. We have also found that business in some regions
slows in the summer due to vacations, increases again in the fall, and then tends to drop off again towards the end of
the year when our customers minimize their inventories, at least in a stable environment. These fluctuations have a
direct impact on the use of working capital and therefore also on our net financial debt and cash flow. Working
capital requirements are generally high in the first half of the year, which is reflected by increases in net financial
debt. In the final quarter of the year, less working capital is typically required and net financial debt decreases
accordingly. These seasonal effects can cause differences in revenue and earnings among the various quarters of any
financial year, which means the individual quarters should not be directly compared with each other or be multiplied
to predict annual results.
Trends
In 2010, our business started to recover. Due to restocking — particularly during the second quarter — as a result
of the economic recovery, as well as our acquisitions, sales volumes in 2010 were 29.0% higher than in 2009. A
significant portion of the increase was attributable to the acquisition of Becker Stahl, which we believe positions us
well to benefit from the strong recovery in the automotive sector and from the momentum in the machinery and
mechanical engineering industry, particularly in Germany. Reflecting the trend in sales volumes combined with rising
prices, sales rose by 34.7% in 2010. This trend was reflected in all key earnings figures, with both the impact of higher
prices and sustained cost-cutting measures in our efficiency-enhancement programs contributing to significant
improvements. As a result, in 2010 EBITDA increased to EUR 237.8 million from minus EUR 68.5 million in 2009,
EBT to EUR 84.3 million from minus EUR 239.8 million in 2009 and net income to EUR 80.2 million from minus
EUR 185.7 million in 2009. Higher prices and the positive trend in sales volumes meant that more funds were tied up
in working capital. The positive trend continued in the first quarter of 2011. Sales for the first quarter of 2011
amounted to EUR 1,586.8 million, representing an increase of EUR 538.0 million, or 51.3%, from EUR 1,048.8 million
for the corresponding period in the previous year. This increase was primarily due to an increase in sales volume of
26.9% to 1,498 million tons in the first quarter of 2011 and a higher average selling price. The increase in sales volume
was positively impacted by our acquisitions (primarily Becker Stahl, which was first consolidated on March 1,
2010) and by the further recovery of the economy in most of our markets, in particular in the industrial machinery and
equipment area. EBITDA increased by EUR 75.4 million from EUR 29.1 million in the first quarter of 2010 to
EUR 104.5 million in the first quarter of 2011. EBT rose from negative EUR 4.5 million in the first quarter of 2010 by
EUR 71.0 million to EUR 66.5 million in the first quarter of 2011 reflecting the significant improvement in operating
result; net income rose by EUR 42.4 million to EUR 44.1 million in the first quarter of 2011 from EUR 1.7 million in
the first quarter of 2010.
Description of Key Line Items in the Income Statement
We use total cost accounting in preparing our financial statements. Certain items from our income statement
are discussed in greater detail below.
59

Sales
Sales that result from our own operating output are recognized as sales revenue. Such revenue is generated by
the distribution of merchandise of all kinds, especially steel, metal and other products, such as nonferrous metals
and professional hardware, as well as by the processing of such merchandise. Sales are derived primarily from the
distribution of products from distribution locations and from direct shipments on a commission basis (delivery of
products directly from the metal producer to the customer) and from processing on a contract basis. We recognize
revenues in accordance with IFRS, which generally results in recognition at the time of delivery. For further details,
see “— Critical Accounting Policies —Revenue recognition”.
Other operating income
The item “other operating income” is a generic term for all income from ordinary business activities not
already recognized in other income items. For us, this item relates primarily to income from the reversal of
provisions, disposals of assets, foreign currency exchange gains and rental and leasing income.
Change in inventory
The item “change in inventory” represents the difference in the amount of work in progress and finished goods
at year end compared to the beginning of the year, adjusted for currency effects. Most of our inventory consists of
merchandise, changes of which are not reflected in this item, but included in cost of materials.
Cost of materials
Cost of materials includes expenses for goods and services received and expenses for raw materials and
supplies. For us, this item primarily recognizes cost of sales, measured using the weighted average cost method. See
“— Introduction —Material factors affecting results of operations —Metal prices”. This line item also reflects
price-related and other devaluations of inventories.
Personnel expenses
Personnel expenses represent expenses for wages and salaries including bonuses, social security contributions,
pension plans as well as social plans and termination settlements.
Depreciation, amortization and impairments
Depreciation, amortization and impairments include depreciation and amortization of tangible and intangible
assets as well as impairments of goodwill and property, plant and equipment.
Other operating expenses
The item “other operating expenses” is a generic term for all expenses in connection with ordinary business
activities that do not fall under the items cost of materials, personnel expenses and depreciation, amortization and
impairments. For us, this item primarily includes expenses for transportation, repairs and maintenance, rentals and
leases, supplies, other third-party services, other taxes, auditing and consulting expenses and insurance.
Operating result
Operating result equals sales, other operating income, change in inventory and own work capitalized less cost
of materials, personnel expenses, depreciation, amortization and impairments and other operating expenses.
Financial result
Financial result represents the net of financial expense and income.
Minority interests
Minority interests represent the portion of results attributable to minority shareholders of group companies.
During the reporting period, these included in particular the holding companies in France (Klöckner Distribution
Industrielle S.A. had a 10% minority shareholder until early July 2009, whose interest was since reduced to 3.2%)
and Switzerland (Debrunner Koenig Holding AG, where we acquired the last remaining minority shares in the first
half of 2008).
60

Results of Operations for the Years 2008, 2009 and 2010 and the First Quarters of 2010 and 2011
The table below shows our consolidated income statement for the financial years 2008, 2009 and 2010 and the
three month periods ended March 31, 2010 and 2011. In our consolidated financial statements for the fiscal year
2009, certain comparison amounts relating to the income statement for the fiscal year 2008 have been amended
from the amounts reported in the relevant historical consolidated financial statements due to the initial application
of IFRIC 14. IFRIC 14 provides general guidance on how to assess the limit IAS 19 places on the amount of the
surplus of a pension plan that can be recognized as an asset. In the tables below, amounts derived from the
consolidated income statement for the fiscal year 2008 and 2009 include such adjusted numbers.
Years ended December 31,
First quarter ended
March 31
2008 2009 2010 2010 2011
(unaudited) (unaudited)
(in thousands of EUR)
Selected data from the consolidated
income statement
Sales ........................... 6,749,595 3,860,493 5,198,181 1,048,841 1,586,799
Other operating income .............. 371,182 127,359 35,822 8,028 8,475
Change in inventory ................ 10,832 (8,661) (7,383) (698) 7,342
Own work capitalized ............... 73 10 39 5 —
Cost of materials . . . ................ (5,394,417) (3,206,830) (4,054,830) (812,538) (1,241,008)
Personnel expenses . ................
Depreciation, amortization and
(546,017) (441,184) (486,618) (111,180) (131,520)
impairments .................... (67,372) (109,638) (85,783) (18,393) (18,653)
thereof impairment losses. .......... — (41,782) — — —
Other operating expenses. ............ (590,612) (399,684) (447,442) (103,372) (125,589)
Operating result .................. 533,264 (178,135) 151,986 10,693 85,846
Income from investments. ............ — 2 5 — —
Financial result ................... (69,782) (61,699) (67,650) (15,156) (19,350)
Income before taxes. ............... 463,482 (239,832) 84,341 (4,463) 66,496
Income taxes. .....................
Net income attributable to minority
(79,308) 54,168 (4,129) 6,194 (22,350)
interests .......................
Net income attributable to Klöckner &
(14,161) 2,820 2,671 595 684
Co SE shareholders ............... 398,335 (188,484) 77,541 1,166 43,462
Net income ...................... 384,174 (185,664) 80,212 1,731 44,146
Comparison of the periods from January 1 to March 31, 2010 and 2011
Sales
Sales for the first quarter of 2011 amounted to EUR 1,586.8 million, representing an increase of EUR 538.0 million,
or 51.3%, from EUR 1,048.8 million for the corresponding period in the previous year. This increase was primarily due to
an increase in sales volume of 26.9% to 1,498 million tons in the first quarter of 2011 and a higher average selling price
(in each case compared to the first quarter of 2010). The increase in sales volume was positively impacted by our
acquisitions (primarily Becker Stahl, which was first consolidated on March 1, 2010) and by the further recovery of the
economy in most of our markets, in particular in the industrial machinery and equipment area. The most significant
volume increases were achieved in the United States and Germany, while volumes in Spain were lower due to the
continuing weak construction sector. Adjusted for the acquisition of Becker Stahl, sales volumes at the Group level
increased 12.5%. Sales increased more than sales volumes as a result of increased prices. Adjusted for acquisitions, sales
increased by 39.4%.
Other operating income
Other operating income amounted to EUR 8.5 million in the first quarter of 2011, a slight increase of
EUR 0.5 million from EUR 8.0 million in the corresponding period in the previous year.
61

Cost of materials
The cost of materials increased by EUR 428.5 million, or 52.7%, to EUR 1,241.0 million in the first quarter of
2011 from EUR 812.5 million for the corresponding period in the previous year. The increase in cost of materials
was primarily due to the increase in sales volumes and prices compared to the first quarter of 2010. Market prices for
steel products increased over the first quarter of 2011, before leveling out at the end of quarter. Our gross profit
margin (sales and changes in inventory minus costs of materials expressed as a percentage of sales) was almost
unchanged at 22.3% for the first quarter of 2011 compared to 22.5% for the first quarter of 2010.
Personnel expenses
Personnel expenses in the first quarter of 2011 increased by EUR 20.3 million, or 18.3%, from EUR 111.2 million
in the corresponding period in the previous year to EUR 131.5 million, mainly due to acquisitions and — compared to the
first quarter of 2010 — higher bonus payments due to improved business performance. Without the acquisition of Lake
Steel (which closed in December 2010), total headcounts at the end of the first quarter 2011 were about on the same level
as at the end of the first quarter 2010 despite significantly higher sales volumes.
Depreciation, amortization and impairments
In the first quarter of 2011, depreciation, amortization and impairments amounted to EUR 18.7 million, a small
increase of EUR 0.3 million from EUR 18.4 million in the corresponding period in the previous year.
Other operating expenses
Other operating expenses increased by EUR 22.2 million, or 21.5%, to EUR 125.6 million in the first quarter of
2011, compared to EUR 103.4 million in the corresponding period in the previous year. This increase was mainly
due to the sales volume driven increase in forwarding costs and the impact of acquisitions.
Operating result
In the first quarter of 2011, the operating result amounted to EUR 85.8 million, an increase of EUR 75.1 million
from EUR 10.7 million in the corresponding period in the previous year. This increase was predominantly a
consequence of the increases in sales and gross profit.
Financial result
The financial result decreased by EUR 4.2 million from negative EUR 15.2 million in the first quarter of 2010
to negative EUR 19.4 million in the first quarter of 2011 due to higher average debt levels as a consequence of
improved business activities, acquisition funding and the new convertible bond issued at the end of 2010.
Income before taxes
The income before taxes rose from negative EUR 4.5 million in the first quarter of 2010 by EUR 71.0 million
to EUR 66.5 million in the first quarter of 2011, reflecting the significant improvement in operating result.
Income taxes
Income taxes changed from a positive tax income of EUR 6.2 million in the first quarter 2010 to tax expenses
of EUR 22.4 million in the first quarter 2011, a swing of EUR 28.6 million, predominantly resulting from the
improved operating results in the first three months of 2011 as compared to the corresponding period in 2010.
Whereas income taxes in the first quarter 2010 were positively affected in the amount of EUR 8.2 million by the
initial recognition of a deferred tax asset on previously unrecognized tax loss carried forward as a result of a
business combination consummated in March 2010, the income taxes of the first three months of 2011 returned to a
regular level.
Net income/loss
Net income rose by EUR 42.4 million to EUR 44.1 million in the first quarter of 2011 from EUR 1.7 million in
the first quarter of 2010 due to the factors described above.
Minority interests
Minority interests in the income for the first quarter of 2011 were EUR 0.7 million compared to EUR 0.6 million
in the corresponding period in 2010.
62

EBITDA
EBITDA increased by EUR 75.4 million from EUR 29.1 million in the first quarter of 2010 to EUR 104.5 million
in first three months of 2011. This increase was driven by the positive business development with rising volumes and
prices and the acquisitions.
Comparison of the periods from January 1 to March 31, 2010 and 2011 at the segment level
The operating activities of the Company are divided into two segments, Europe and North America. A third
segment, “Headquarters/Consolidation”, is also used for purposes of financial reporting.
Sales at the segment level
The table below shows the development of our sales by segment for the first quarter ended March 31, 2010 and
2011:
First quarter ended March 31,
2010 2011
(unaudited) (unaudited)
(in millions of EUR)
Sales Europe ............................................. 857.9 1,290.1
Sales North America ....................................... 190.9 296.7
Sales Headquarters/Consolidation .............................. 0.0 0.0
Sales Klöckner & Co Group ................................ 1,048.8 1,586.8
SALES –SEGMENT EUROPE
European sales increased by EUR 432.2 million, or 50.4%, from EUR 857.9 million in the first quarter of 2010
to EUR 1,290.1 million in the first quarter of 2011. This increase was primarily due to a 28.1 % rise in sales volume
to 1,164 thousand tons, a 17.4% increase in average selling prices and the consolidation over the entire three months
period of the acquired Becker Stahl business, which was first consolidated in March 2010.
SALES –SEGMENT NORTH AMERICA
North American sales increased by EUR 105.8 million, or 55.4%, from EUR 190.9 million in the first quarter
of 2010 to EUR 296.7 million in the first quarter of 2011. This increase is primarily a consequence of increased sales
volumes which increased by 23.0% and increased average selling prices which increased by 26.3% as a result of the
improved economic conditions and rising demand.
EBITDA at the segment level
The table below shows the development of our EBITDA for the three segments for the first quarter ended
March 31, 2010 and 2011:
First quarter ended March 31,
2010 2011
(unaudited) (unaudited)
(in millions of EUR)
EBITDA Group .......................................... 29.1 104.5
Of which Europe ........................................ 24.5 81.0
Of which North America .................................. 9.1 30.0
Of which Headquarters/Consolidation ......................... (4.5) (6.5)
EBITDA – SEGMENT EUROPE
EBITDA recorded by the European segment rose from EUR 24.5 million in the first quarter of 2010 by
EUR 56.5 million to EUR 81.0 million in the first quarter of 2011. EBITDA for the first quarter of 2011 was
positively influenced by the positive general economic developments with rising volumes and prices. With the
exception of Spain, all companies belonging to the European segment improved their EBITDA compared to the
same period 2010. In relative terms Becker Stahl and the UK and France operating companies developed positively,
with Becker Stahl delivering the biggest contribution to the segment’s first quarter EBITDA. Our Spanish
operations on the other hand continued to be negatively affected by the crisis in the construction industry.
63

EBITDA – SEGMENT NORTH AMERICA
EBITDA of the segment North America rose from EUR 9.1 million in the first quarter of 2010 by
EUR 20.9 million to EUR 30.0 million in the first quarter of 2011. EBITDA in the North American segment
was positively influenced by the ongoing recovery of the economy resulting in higher volumes and sales prices.
Especially our industry related plate business developed positively.
EBITDA – SEGMENT HEADQUARTERS/CONSOLIDATION
EBITDA of the segment Headquarters/Consolidation decreased by EUR 2.0 million to negative EUR 6.5 million
in the first quarter of 2011 from negative EUR 4.5 million in the corresponding period in 2010.
Comparison of the fiscal years 2009 and 2010
Sales
Sales for the fiscal year 2010 amounted to EUR 5,198.2 million, representing an increase of EUR 1,337.7 million,
or 34.7%, from EUR 3,860.5 million for the previous fiscal year. This increase was primarily due to an increase in sales
volume of 29.0% to 5.3 million tons in fiscal year 2010 and a higher average selling price. The increase in sales volume
was mainly due to our acquisitions and to the recovery of the economy, in particular in the industrial machinery and
equipment area. The most significant volume increases were achieved in the United States and Germany, while
volumes in The Netherlands and Spain developed more slowly due to the continuing weak construction industry
sector. The acquisition of Becker Stahl and further acquisitions contributed positively to increased sales volume;
adjusted for acquisitions, sales volumes at the Group level would have increased 10.0%. Sales increased more than
sales volumes due to increasing prices, in particular in the first half of 2010, flattening later in the year. Adjusted for
acquisitions, sales would have increased by 20.4%.
Other operating income
Other operating income amounted to EUR 35.8 million in the fiscal year 2010, a decrease of EUR 91.5 million,
or 71.9%, from EUR 127.4 million in the previous fiscal year. Operating income in 2009 included a gain of
approximately EUR 80 million from a reduction of the antitrust fine on KDI S.A.S. imposed by the French antitrust
authority. This extraordinary income in 2009 explains the majority of the decrease in operating income between
2009 and 2010.
Cost of materials
The cost of materials increased by EUR 848.0 million, or 26.4%, to EUR 4,054.8 million in the fiscal year 2010
from EUR 3,206.8 million for the previous fiscal year. The increase in cost of materials was primarily due to the
improved business environment with rising volumes and prices compared to significant pricing and volume
pressure and massive destocking in major parts of 2009. Market prices for steel products increased strongly over the
first half of 2010, then flattened out or decreased slightly, until they started to increase again at the end of 2010. Our
gross profit margin (sales and changes in inventory minus costs of materials expressed as a percentage of sales) rose
from 16.7% for the fiscal year 2009 to 21.9% for fiscal year 2010, positively impacted by price effects due to rising
steel prices.
Personnel expenses
Personnel expenses increased by EUR 45.4 million, or 10.3%, from EUR 441.2 million in the fiscal year 2009
to EUR 486.6 million in fiscal year 2010, mainly due to an increase in headcount of 675 in connection with the
acquisition of Becker Stahl and — compared to 2009 — higher bonus payments due to improved business
performance. Without the acquisition-related headcount, total headcount remained almost stable in 2010 compared
to 2009, despite a significant increase in sales volumes.
Depreciation, amortization and impairments
In the fiscal year 2010, depreciation, amortization and impairments amounted to EUR 85.8 million and
decreased by EUR 23.9 million, or 21.8%, from EUR 109.6 million in the previous fiscal year. This decrease was
primarily due to high impairment charges totaling EUR 41.8 million in 2009. Most of these impairment charges
related to the impairment of property, plant and equipment of our Spanish subgroup.
64

Other operating expenses
Other operating expenses increased by EUR 47.8 million, or 11.9%, to EUR 447.4 million in the fiscal year
2010, compared to EUR 399.7 million in the previous fiscal year. The increase was mainly due to the sales volume
driven increase in forwarding costs and the impact of acquisitions. A further effect relates to the sale of our previous
subsidiary KIS Information Services GmbH (KIS) in 2009 resulting in an increase in third-party services expense
due to ongoing services sourced from KIS after its deconsolidation.
Operating result
In the fiscal year 2010, operating result improved significantly by EUR 330.1 million from negative
EUR 178.1 million in 2009 to EUR 152.0 million in the fiscal year 2010. This increase was predominantly a
consequence of the increases in sales and gross profit margin.
Financial result
The financial result decreased by EUR 6.0 million from negative EUR 61.7 million in the fiscal year 2009 to
negative EUR 67.7 million in the fiscal year 2010. Due to rising working capital needs and as a consequence of our
acquisitions, net financial indebtedness rose in 2010 to EUR 136.9 million (compared to a net cash position of
EUR 149.6 million at December 31, 2009). The financial result in 2009 was affected by non-recurring charges in the
amount of EUR 7.7 million due to fees payable in connection with the restructuring and stabilization of our Senior
Revolving Credit Facility and our European ABS program.
Income before taxes
Income before taxes improved by EUR 324.2 million from negative EUR 239.8 million in the fiscal year 2009
to EUR 84.3 million in the fiscal year 2010, reflecting the significant improvement in operating result.
Income taxes
Income taxes changed from a positive tax income of EUR 54.2 million in the fiscal year 2009 to tax expenses of
EUR 4.1 million in the fiscal year 2010, a swing of EUR 58.3 million, predominantly resulting from the improved
results in 2010 as compared to 2009. Moreover, tax expense was mainly positively affected by the initial recognition
of a deferred tax asset on tax loss carried forward and temporary differences originating in prior years amounting to
EUR 19.5 million (2009: EUR 4.2 million), as well as the utilization of previously unrecognized tax loss carried
forward and temporary differences leading to current tax benefits of EUR 7.9 million (2009: EUR 1.3 million). This
was mainly a result of a business combination consummated in 2010 generating tax savings of EUR 6.9 million in
2010.
Net income/loss
As a result of the higher operating income combined with relatively low income taxes due to the factors
described above, net income increased significantly by EUR 265.9 million from negative EUR 185.7 million in the
fiscal year 2009 to a net income of EUR 80.2 million in the fiscal year 2010.
Minority interests
Minority interests in the net income for the fiscal year 2010 were EUR 2.7 million compared to minority
interests of EUR 2.8 million in the previous fiscal year.
EBITDA
Our EBITDA rose by EUR 306.3 million from negative EUR 68.5 million in the fiscal year 2009 to positive
EUR 237.8 million in the fiscal year 2010. This increase was driven by the positive general economic developments
with rising volumes and prices.
Comparison of the fiscal years 2009 and 2010 at the segment level
The operating activities of the Company are divided into two segments, Europe and North America. A third
segment, “Headquarters/Consolidation”, is also used for purposes of financial reporting.
65

SALES AT THE SEGMENT LEVEL
The table below shows the development of our sales by segment for the fiscal year ended December 31, 2009
and 2010:
Twelve months ended
December 31,
2009 2010
(in millions of EUR)
Sales Europe .................................................. 3,186.2 4,311.5
Sales North America. ............................................ 674.3 886.7
Sales Headquarters/Consolidation ................................... 0 0
Sales Klöckner & Co Group ...................................... 3,860.5 5,198.2
SALES –SEGMENT EUROPE
European sales increased by EUR 1,125.3 million, or 35.3%, from EUR 3,186.2 million in the fiscal year 2009
to EUR 4,311.5 million in the fiscal year 2010. This increase was primarily due to a 32.6% rise in sales volume to
4,185 thousand tons, a 2.1% increase in average selling prices and the first consolidation of the acquired Becker
Stahl business.
SALES –SEGMENT NORTH AMERICA
North American sales increased by EUR 212.4 million, or 31.5%, from EUR 674.3 million in the fiscal year
2009 to EUR 886.7 million in the fiscal year 2010. This increase is primarily a consequence of increased sales
volumes of 17.4% and average selling prices increased by 12.0% following the improved economic conditions and
rising demand.
EBITDA at the segment level
The table below shows the development of our EBITDA for the three segments for the twelve months periods
ended December 31, 2009 and 2010:
Twelve months ended
December 31,
2009 2010
(in millions of EUR)
EBITDA Group ................................................ (68.5) 237.8
Of which Europe .............................................. 56.6 222.6
Of which North America ........................................ (43.6) 33.0
Of which Headquarters/Consolidation ............................... (81.5) (17.9)
EBITDA – SEGMENT EUROPE
EBITDA recorded by the European segment rose from EUR 56.6 million in the fiscal year 2009 by
EUR 166.0 million to EUR 222.6 million in the fiscal year 2010 as a consequence of the improved economic
environment with rising sales volumes and price increases. EBITDA for 2009 was positively influenced by the nonrecurring
effect of the adjustment amount for antitrust provision in the fourth quarter of fiscal year 2009; without
that effect EBITDA would have been negative at EUR 91.1 million. All companies belonging to the European
segment generated positive EBITDAwhich was in each case above the previous year’s level taking into account the
effects from the adjustment of the KDI antitrust provision. In particular, Becker Stahl and the Swiss operating
company developed positively and contributed the biggest portion to group EBITDA. Our German operations in
general developed positively. Our Spanish operations, however, continued to be negatively affected by the crisis in
the construction industry.
EBITDA – SEGMENT NORTH AMERICA
EBITDA of the North American segment rose from negative EUR 43.6 million in the fiscal year 2009 by
EUR 76.6 million to EUR 33.0 million in the fiscal year 2010. EBITDA in the North American segment was
positively influenced by the recovery of the economy resulting in restocking. In particular, volumes, sales and
results of Primary and Temtco which were acquired in 2007 and 2008, respectively, developed positively.
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EBITDA – SEGMENT HEADQUARTERS/CONSOLIDATION
EBITDA of the Headquarters/Consolidation segment improved significantly by EUR 63.6 million to negative
EUR 17.9 million in the fiscal year 2010 from negative EUR 81.5 million in the previous fiscal year. Comparison of
the Headquarters/Consolidation segment is limited by non-recurring effects amounting to EUR 67.4 million in the
fiscal year 2009 in connection with an adjustment of the reimbursement claim against former shareholders in
connection with antitrust fines.
Comparison of the fiscal years 2008 and 2009
Sales
Sales for the fiscal year 2009 amounted to EUR 3,860.5 million, representing a decrease of EUR 2,889.1 million,
or 42.8%, from EUR 6,749.6 million for the previous fiscal year. This decrease was primarily due to a drop in sales
volume of 31.0% to 4.1 million tons in fiscal year 2009, and a lower average selling price, especially during the first
three quarters of 2009. The drop in sales volume was mainly due to the continued overall weak economy, in particular
in the construction industry as our most important customer industry, and hit all country organizations. The sales
volume declines were lower in France and Switzerland than in other countries. In Switzerland this was primarily due to
the development of the local construction industry which was less impacted by the crisis than in other countries. The
disposal of our Canadian subsidiary Namasco Ltd. in July 2008 and Koenig Verbindungstechnik AG group (KVT) in
September 2008 with EUR 206.5 million of attributable sales, which were consequently not part of our sales in fiscal
year 2009, led to a further reduction of sales volume in 2009. Adjusted for this effect, the decrease in sales volume
would have been 27.2%.
Other operating income
Other operating income amounted to EUR 127.4 million in fiscal year 2009, a decrease of EUR 243.8 million,
or 65.7%, from EUR 371.2 million in the previous fiscal year. Operating income in 2008 included the gain on sale of
the non-core activities Koenig Verbindungstechnik AG group (KVT) and Namasco Ltd. in the amount of
EUR 273.4 million and net gains from the global settlement with the former shareholder Balli in the amount
of EUR 38.7 million. This decrease in other operating income was partly offset by a reduction of the antitrust fine on
KDI S.A.S. imposed by the French antitrust authority which resulted in gains of EUR 80.2 million in 2009.
Cost of materials
The cost of materials decreased by EUR 2,187.6 million, or 40.6%, to EUR 3,206.8 million in fiscal year 2009
from EUR 5,394.4 million for the previous fiscal year. The overall decrease of cost of materials was primarily due to
falling sales volume. Market prices for steel products continued to decline well into the first half of 2009, continuing
the trend of the last quarter of 2008. However, the price declines due to weak demand slowed down in 2009 and
towards the end of 2009 prices leveled out and for some products even increased slightly. Our gross profit margin
(sales and changes in inventory minus costs of materials expressed as a percentage of sales) declined from 20.2% for
fiscal year 2008 to 16.7% for fiscal year 2009, negatively impacted by price effects due to falling steel prices for a
significant part of fiscal year 2009. Over the whole year, gross margins increased from 7.1% in the first quarter to
22.6 % in the fourth quarter.
Personnel expenses
Personnel expenses decreased by EUR 104.8 million, or 19.2%, from EUR 546.0 million in fiscal year 2008 to
EUR 441.2 million in fiscal year 2009 which was mainly due to the headcount reductions initiated in 2008 and 2009
as part of our immediate action programs as well as lower bonus payments. In addition, the divestiture of the Koenig
Verbindungstechnik AG group (KVT) and Namasco Ltd. resulted in a further decrease, in part compensated by the
effects of the acquisition of Taylor Equipment and Machine Tool Corporation (Temtco).
Depreciation, amortization and impairments
In the fiscal year 2009, depreciation, amortization and impairments amounted to EUR 109.6 million and
increased by EUR 42.3 million or 62.7% from EUR 67.4 million in the previous fiscal year. This increase is
primarily due to impairment charges totaling EUR 41.8 million. Most of these impairment charges related to
impairment of property, plant and equipment of our Spanish subgroup.
67

Other operating expenses
Other operating expenses decreased by EUR 190.9 million, or 32.3%, to EUR 399.7 million in the fiscal year
2009, compared to EUR 590.6 million in the previous fiscal year. This was primarily due to lower freight costs and
generally lower operating expenses reflecting our lower sales volume. The reduction of the antitrust fine on KDI
S.A.S. by the French antitrust authority led to a further reduction of EUR 79.3 million compared to 2008.
Operating result
In the fiscal year 2009, operating result amounted to negative EUR 178.1 million, a decrease of EUR 711.4 million
from EUR 533.3 million in the previous fiscal year. This decrease is predominantly a consequence of the decline in
sales and gross profit reflecting lower sales volumes and the fact that expenses could not proportionally be adapted to
the reduced sales volume.
Financial result
The financial result improved by EUR 8.1 million from negative EUR 69.8 million in the fiscal year 2008 to
negative EUR 61.7 million in the fiscal year 2009, which is partly a consequence of the complete elimination of net
indebtedness until the end of fiscal year 2009 compared to net financial indebtedness of EUR 570.8 million as of
December 31, 2008. The indebtedness could be paid down due to higher cash flows as a result of reduced net
working capital and the rights offering in September 2009. At the end of 2009 we had a net cash position of
EUR 149.6 million. The financial result was affected by non-recurring charges in the amount of EUR 7.7 million
due to fees payable in connection with the restructuring and stabilization of our Senior Revolving Credit Facility
and the European ABS program which were incurred in the first half of the fiscal year 2009.
Income before taxes
The income before taxes dropped from EUR 463.5 million in fiscal year 2008 by EUR 703.3 million to
negative EUR 239.8 million in the fiscal year 2009 following the significant drop in operating result.
Income taxes
Income taxes improved to positive tax income of EUR 54.2 million in the fiscal year 2009, a swing of
EUR 133.5 million from tax expenses of EUR 79.3 million in the previous fiscal year, as significant tax recoveries
as well as deferred tax assets were recorded following the negative earnings. Additionally, the reduction of the cartel
fine imposed on KDI in combination with the reduction of a related claim of refund against a previous shareholder
had a positive impact on the tax income amounting to EUR 27.1 million (respective tax expense 2008:
EUR 30.1 million). The tax expense of 2008 was positively affected by tax free income (positive tax effect:
EUR 57.2 million) predominantly resulting from the tax exempt sale of Swiss domiciled KVT.
Net income/loss
As a result of the lower operating income, net income fell by EUR 569.8 million to negative EUR 185.7 million
in the fiscal year 2009 from EUR 384.2 million in the fiscal year 2008.
Minority interests
Minority interests in the loss for the fiscal year 2009 were EUR 2.8 million compared to negative
EUR 14.2 million in the previous fiscal year.
EBITDA
Despite income of EUR 80,2 million from the reduction in the KDI antitrust fine, EBITDA decreased by
EUR 669.1 million from EUR 600.6 million in the fiscal year 2008 to negative EUR 68.5 million in the fiscal year
2009. This decrease was driven by the ongoing effects of general economic developments that had a material
negative impact on demand, and negative price effects from the continuing fall in steel prices especially in the first
half of fiscal year 2009. In the second half of fiscal year 2009, EBITDA improved primarily due to increasing selling
prices and lower write-downs on inventories as well as the results of cost-cutting measures.
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Comparison of the fiscal years 2008 and 2009 at the segment level
SALES AT THE SEGMENT LEVEL
The table below shows the development of our sales by segment for the fiscal year ended December 31, 2008
and 2009:
Twelve months ended
December 31,
2008 2009
(in millions of EUR)
Sales Europe .................................................. 5,373.7 3,186.2
Sales North America. ............................................ 1,375.9 674.3
Sales Headquarters/Consolidation ................................... 0 0
Sales Klöckner & Co Group ...................................... 6,749.6 3,860.5
SALES –SEGMENT EUROPE
European sales decreased by EUR 2,187.5 million, or 40.7%, from EUR 5,373.7 million in the fiscal year 2008
to EUR 3,186.2 million in the fiscal year 2009. This decrease was primarily due to a 26.9% reduction in sales
volume to 3,156.7 thousand tons and a 18.9% decrease in average steel prices. This decline in prices was primarily
due to weak demand in the construction industry, our most important customer industry, and in the machinery and
mechanical industry which suffered from a sharp drop in capital expenditures worldwide. Prices continued to fall
well into the first half of 2009 following the steep price declines already seen in the fourth quarter of 2008 and
leveled out or slightly recovered in the second half of 2009. Sales volumes that fell rapidly in the last quarter of 2008
continued to fall for the most part of the first half of 2009 due to the poor economic situation and ongoing destocking
along the whole value chain. In the second half of 2009 sales volume recovered slightly.
SALES –SEGMENT NORTH AMERICA
North American sales decreased by EUR 701.6 million, or 51.0%, from EUR 1,375.9 million in the fiscal year
2008 to EUR 674.3 million in the fiscal year 2009. This decrease is primarily a consequence of the reduction of sales
volumes of 41.9% to 963 thousand tons following the poor economic environment and weak demand, in particular
in the construction industry, destocking effects along the value chain and the divestiture of our Canadian business
Namasco Ltd. in July 2008. Steel prices halved compared to the high in the third quarter of 2008. Excluding the
effect of the Namasco Ltd. disposal, our sales volume in North America was 28.1% lower than in the previous year.
EBITDA at the segment level
The table below shows the development of our EBITDA for the three segments for the twelve months periods
ended December 31, 2008 and 2009:
Twelve months ended
December 31,
2008 2009
(in millions of EUR)
EBITDA Group ................................................ 600.6 (68.5)
Of which Europe .............................................. 376.9 56.6
Of which North America ........................................ 148.6 (43.6)
Of which Headquarters/Consolidation ............................... 75.1 (81.5)
EBITDA – SEGMENT EUROPE
EBITDA recorded by the European segment fell from EUR 376.9 million in the fiscal year 2008 by
EUR 320.3 million to EUR 56.6 million in the fiscal year 2009 as a consequence of the poor economic environment
with sales volumes remaining at low levels and continuing price drops in the first half of 2009 resulting in
significant price driven losses and low operating results. Not counting the non-recurring effect of the adjustment
amount for antitrust provision in the fourth quarter of fiscal year 2009, EBITDA would have been negative
EUR 91.1 million. All countries showed significant decreases in gross profit that could only somewhat be
compensated for by cost saving measures introduced under our immediate action program.
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EBITDA – SEGMENT NORTH AMERICA
EBITDA of the segment North America fell from EUR 148.6 million in the fiscal year 2008 by EUR 192.2 million
to negative EUR 43.6 million in the fiscal year 2009. This drop was primarily due to the poor economic environment
resulting in strong volume drops and negative price driven effects that resulted in significantly reduced operating
income in the first half of fiscal year 2009. Even though the sales volume slightly increased in the second half of fiscal
year 2009, the overall decrease of sales could not be compensated by cost saving measures and resulted in a reduction
of operating result and EBITDA.
EBITDA – SEGMENT HEADQUARTERS/CONSOLIDATION
EBITDA of the segment Headquarters/Consolidation decreased significantly by EUR 156.6 million to
negative EUR 81.5 million in the fiscal year 2009 from EUR 75.1 million in the previous fiscal year. The negative
impact was primarily due to our reimbursement claim against former shareholders for the indemnification in
relation to the antitrust fines which resulted in a charge of EUR 67.4 million.
Liquidity and Capital Resources
Consolidated cash flows
The consolidated cash flows of the Klöckner & Co Group for the years ended December 31, 2008, 2009 and
2010 and the three month periods ended March 31, 2010 and 2011 are set forth below.
Three months ended
Years ended December 31,
March 31,
2008 2009 2010 2010 2011
(unaudited)
(in millions of EUR)
(unaudited)
Operating cash flow. ......................... 386.4 (157.7) 235.2 29.0 104.3
Inventories ................................. (6.4) 431.2 (168.2) (110.6) (162.4)
Trade receivables. ............................ 143.4 337.6 (136.7) (141.2) (234.8)
Trade payables .............................. (223.7) 0.6 108.2 156.0 230.5
Changes in working capital .................... (86.7) 769.3 (196.7) (95.8) (166.7)
Other ..................................... (112.8) (47.0) (3.2) 6.4 (7.0)
Cash flow from operating activities .............. 186.9 564.7 35.2 (60.4) (69.4)
Inflow from divestments and disposals of fixed assets . . 387.7 13.9 3.7 1.0 0.7
Outflow from acquisitions ...................... (264.4) 0.0 (164.5) (124.3) 0.0
Outflow from capital expenditure ................. (48.1) (25.0) (27.0) (4.0) (6.0)
Outflow/Inflow from margin deposits .............. (3.1) 3.1 0.0 0.0 0.0
Cash flow from investing activities .............. 72.1 (8.0) (187.7) (127.3) (5.3)
Capital increase / decrease ...................... 0.0 193.1 (1.2) 0.0 0.0
Convertible bond (incl. equity component) . . ........ 0.0 95.7 183.3 0.0 0.0
Changes in financial liabilities ................... (46.0) (283.5) 114.7 (23.4) 74.4
Net interest payments ......................... (37.8) (28.2) (43.3) (2.8) (3.8)
Dividends .................................. (39.7) (1.0) (1.5) 0.0 0.0
Cash flow from financing activities .............. (123.4) (23.8) 252.0 (26.2) 70.6
Increase/Decrease in cash and cash equivalents. .... 135.5 532.8 99.4 (213.9) (4.1)
Our cash flow statement is presented in accordance with IAS 7 and shows the sources and uses of funds. The
changes in balance sheet items that are used for the cash flow statement are not arrived at by merely comparing the
respective balance sheet at the beginning and the end of the period, but are also adjusted for the effects of currency
translation and changes in the composition of the consolidated group entities. In the case of changes in the
composition of the consolidated group, the resulting effects on balance sheet items necessary to prepare the cash
flow statement are deducted or added upon initial consolidation or deconsolidation.
Cash flow from operating activities
Our cash flow from operating activities is significantly influenced by changes in working capital. In part,
changes in working capital are triggered by price changes, which affect the replacement costs of our inventory.
70

Shifts in the value of trade receivables and payables can also significantly affect cash flow and net financial debt. In
general, however, the effect of market changes on our cash flow historically has been less significant than their
impact on profitability which is influenced by metal price changes. For further discussion, see “— Introduction —
Material factors affecting results of operations — Metal prices”.
Comparison of first quarters 2010 and 2011. Cash flow from operating activities decreased slightly by
EUR 9.0 million from negative EUR 60.4 million in the first quarter 2010 to negative EUR 69.4 million in the first
quarter 2011. The improving demand and the rise in prices significantly increased the operating cash flow by
EUR 75.3 million from EUR 29.0 million in the first quarter 2010 to EUR 104.3 million in the first quarter 2011.
The improved operating cash flow in the first quarter 2011 was, however, more than compensated by the
development of the working capital (net of foreign currency exchange effects, changes in the scope of consolidation
and reclassification to assets held for sale) which resulted in a cash outflow of EUR 166.7 million in the first quarter
2011 compared with a cash outflow of EUR 95.8 million in the first quarter of 2010. The changes reflected the
positive trend in sales volume and sales in 2011.
Comparison of 2009 and 2010. Cash flow from operating activities decreased significantly by EUR 529.5 million
from EUR 564.7 million in 2009 to EUR 35.2 million in 2010. The development reflects the business model which
entails increased working capital needs in times of increasing demand and, accordingly, negative impacts in cash flow
from operating activities. Net working capital increased net of foreign currency exchange effects, changes in the scope of
consolidation and reclassification to assets held for sale by EUR 196.7 million in 2010 compared to a decrease of
EUR 769.3 million in 2009. The increase of net working capital was, however, overcompensated by the development of
operating cash flow. The positive trend in sales volumes and sales is reflected in an increased operating cash flow from
minus EUR 157.7 million in 2009 to EUR 235.2 million in 2010.
Comparison of 2008 and 2009. Cash flow from operating activities increased by EUR 377.8 million from
EUR 186.9 million in 2008 to EUR 564.7 million in 2009. This increase was primarily due to a EUR 769.3 million
overall decrease of net working capital in 2009 (net of foreign currency exchange effects, changes in the scope of
consolidation and reclassifications of assets held for sale), more than compensating for a negative EUR 157.7 million
operating cash flow primarily attributable to the negative operating results due to the poor economic environment.
The net working capital development from minus EUR 86.7 in 2008 to EUR 769.3 Mio in 2009 was driven by
initiatives to reduce stock levels in the context of our immediate action program and renegotiated payment terms
with our key suppliers in most countries, as well as lower trade receivables reflecting the reduced sales volumes.
Cash flow from investing activities
Comparison of first quarters 2010 and 2011. Cash outflows from investing activities decreased by
EUR 122.0 million from EUR 127.3 million in the first quarter 2010 to EUR 5.3 million in the first quarter
2011. This change was mainly attributable to the cash outflow for the acquisition of Becker Stahl-Service Group in
the first quarter 2010. Cash outflow for expenditures for property, plant and equipment and intangible assets
amounted to EUR 6.0 million, increasing from EUR 4.0 million in the first quarter of 2010.
Comparison of 2009 and 2010. Cash flow from investing activities increased by EUR 179.7 million from an
outflow of EUR 8.0 million in 2009 to EUR 187.7 million in 2010. This increase of cash used for investing activities
was mainly attributable to the cash outflows for the acquisitions of EUR 164.5 million in 2010 which reflect the
resumption of the acquisition strategy with four acquisitions including Becker Stahl Service Group. Cash outflow
for expenditures for property, plant and equipment and intangible assets amounted to EUR 27.0 million in 2010
remaining largely at the 2009 level of EUR 25.0 million.
Comparison of 2008 and 2009. Cash used for investing activities declined by EUR 80.1 million, from a cash
inflow of EUR 72.1 million in 2008 to a cash outflow of EUR 8.0 million in 2009. This change was mainly
attributable to the temporary suspension of acquisitions and the reduction of capital expenditures in order to
safeguard liquidity, as announced in the context of the first step of our immediate action program. Cash outflow for
expenditures for property, plant and equipment and intangible assets totaled EUR 25.0 million in 2009 compared to
EUR 48.1 million in 2008. Cash outflows for investments were partially offset by cash inflows from the disposal of
non-current assets and assets held for sale and the divestments of consolidated subsidiaries totaling EUR 13.9 million
in 2009 compared to EUR 387.7 million in 2008. Cash flow used in investing activities also benefited from the
refund of restricted cash used as collateral for derivative financial instrument transactions amounting to
EUR 3.1 million (2008: EUR -3.1 million).
71

Cash flow from financing activities
Comparison of first quarters 2010 and 2011. Cash flow from financing activities increased by EUR 96.8 million
from a cash outflow of EUR 26.2 million in the first quarter 2010 to a cash inflow of EUR 70.6 million in the first
quarter 2011. The development in the first quarter 2011 mainly reflected the borrowing requirements for the increased
working capital. Net interest payments increased from EUR 2.8 million in the first quarter of 2010 to EUR 3.8 million
in the first quarter of 2011.
Comparison of 2009 and 2010. Cash flow from financing activities increased by EUR 275.8 million from a
cash outflow of EUR 23.8 million in 2009 to a cash inflow of EUR 252.0 million in 2010. The increase was primarily
due to the issue of a convertible bond in the nominal amount of EUR 186.2 million in December 2010 and net
borrowings in the amount of EUR 114.7 million which includes the proceeds from the issuance of promissory notes of
EUR 144.4 million, the repayment of the shareholder loan of Becker Stahl in the amount of EUR 57.9 million and net
drawings of financial liabilities of EUR 28.2 million. Net interest payments increased from EUR 28.2 million to
EUR 43.3 million in 2010. The decrease of capital of EUR 1.2 million was due to a capital repayment to the minority
shareholder of our French subsidiary.
Comparison of 2008 and 2009. Cash flow from financing activities improved by EUR 99.6 million from a cash
outflow of EUR 123.4 million in 2008 to a cash outflow of EUR 23.8 million in 2009. In 2008, EUR 37.2 million were
paid as dividend to shareholders of Klöckner & Co SE, EUR 46.0 million to reduce financial liabilities and
EUR 37.8 million as net interest payments. In 2009, no dividend was paid to the shareholders of Klöckner & Co and
we issued a convertible bond in the nominal amount of EUR 97.9 million in June 2009 and recorded a cash inflow of
EUR 193.1 million from a rights issue closed in September 2009. We used these funds primarily to further increase our
reserves of cash and to reduce our net financial debt. The cash inflow from the capital markets in the total amount of
EUR 288.8 million was overcompensated by the net repayment of financial liabilities of EUR 283.5 million and the
payment of net interest of EUR 28.2 million.
Capital expenditures
In the first quarter of 2011, payments for intangible assets, property, plant and equipment amounted to
EUR 6.0 million, with the exception of EUR 1.5 million for software licenses mainly for various smaller projects
none of which had a value in excess of EUR 0.6 million.
We believe that capital expenditures for the full year 2011 will amount to approximately EUR 60 million that
has already been budgeted.
In 2010, payments for intangible assets, property, plant and equipment amounted to EUR 27.0 million. These
payments relate to large number of smaller projects, the largest of which relates to a new automatic storage facility
for long products in Cologne with an amount of EUR 2.7 million. All other projects were significantly smaller in
value.
In 2009, payments for intangible assets, property, plant and equipment amounted to EUR 25.0 million, mainly
for various smaller replacement projects, none of which had a value in excess of 10% of the total amount.
In 2008, payments for intangible assets, property, plant and equipment amounted to EUR 48.1 million, of
which EUR 42.9 million relate to payments for property plant and equipment. A very limited amount of our
geographical expansion is by means of greenfield projects, so most of our capital expenditures consisted of
improvements and maintenance of our existing distribution locations. The investments split into a large number of
smaller projects. The single largest project relates to the expansion of our warehousing facilities in the Swiss
location Näfels with a total amount of EUR 1.8 million.
Investments in the years 2008 to 2010 and the first quarter of 2011 were financed from general funds, i.e., from
cash flow from operating activities, liquid funds or short-term credit facilities available from banks.
Capital resources and financing arrangements
Our main sources of liquidity are internally generated funds from operations and our financing arrangements.
Cash flow from operating activities amounted to EUR 186.9 million in 2008, EUR 564.7 million in 2009 and
EUR 35.2 million in the fiscal year 2010. Whether liquidity can be generated from operating activities depends on
prevailing economic conditions, metal prices, the state of the steel industry, competition on the relevant markets and
a variety of other factors that are beyond our control and are discussed in “Risk Factors”.
72

The following table shows our net debt for the financial years 2009 and 2010 and the three months periods
ended March 31, 2010 and 2011.
Years ended
December 31,
Three months ended
March 31,
2009 2010 2010 2011
(unaudited)
(in millions of EUR)
(unaudited)
Cash and cash equivalents (1) ..........................
Long-term debt
826.5 935.0 614.6 927.9
(2) :
1.50% Convertible Bond due 2012 (3) ..................... 288.8 302.3 292.2 305.8
6.0% Convertible Bond due 2014 (4) ...................... 72.1 76.7 73.2 78.0
2.50% Convertible Bond due 2017 (5) ..................... 0.0 148.8 0.0 150.5
Senior Revolving Credit Facility ........................ 222.2 219.4 222.7 219.0
Promissory Notes ................................... 0.0 144.4 0.0 144.5
Swiss bilateral credit facilities .......................... 8.4 22.0 8.7 21.1
U.S. bilateral credit facility ............................ 0.0 0.0 0.0 3.9
German bank facilities ............................... 0.0 15.1 17.3 14.1
Liabilities under ABS Programs ........................ 20.6 87.2 48.1 155.9
Finance leases ..................................... 6.6 4.7 6.2 4.4
Other long-term debt. ................................ 0.0 0.0 0.0 0.0
Subtotal long-term debt (2) ............................ 618.7 1,020.6 668.4 1,097.1
Short-term debt (2) .................................. 52.2 39.6 90.8 45.9
Financing costs ..................................... 6.0 11.7 5.3 12.2
Total debt (6) ....................................... 676.9 1,071.8 764.5 1,155.2
Net debt (7) ........................................ (149.6) 136.9 149.9 227.3
(1) Cash and cash equivalents include cash, cash equivalents and marketable securities.
(2) After deduction of financing costs.
(3) Amount of Convertible Bond — Under IAS 39, convertible investments are split into a debt component and an equity component, which is
equal to the option value at the time of issuance. This results in an equity value of EUR 62.8 million of the Convertible Bond, which is
amortized over the life of the instrument and increases the initial debt component of EUR 262.2 million to the principal amount of
EUR 325.0 million (less any conversions).
(4) Amount of Convertible Bond — Under IAS 39, convertible investments are split into a debt component and an equity component, which is
equal to the option value at the time of issuance. This results in an equity value of EUR 26.5 million of the Convertible Bond, which is
amortized over the life of the instrument and increases the initial debt component of EUR 71.4 million to the principal amount of
EUR 97.9 million (less any conversions).
(5) Amount of Convertible Bond — Under IAS 39, convertible investments are split into a debt component and an equity component which is
equal to the option value at the time of issuance. This results in an equity value of EUR 35.1 million of the Convertible Bond which is
amortized over the life of the instrument and increases the initial debt component of EUR 151.1 million to the principal amount of
EUR 186.2 million (less any conversions).
(6) Total debt before deduction of financing costs.
(7) Net debt represents current and non-current financial liabilities before deduction of financing costs less cash and cash equivalents.
As of March 31, 2011, we held liquid funds comprised of cash, cash equivalents and marketable securities in an
amount of EUR 927.9 million. This amount included cash in an amount of EUR 22.3 million collected in accounts
of consolidated European special purpose vehicles as of the balance sheet date, which amount became available for
general corporate purposes on the following business day. Due to our significant cash position, and including
EUR 309.9 million indebtedness outstanding under our Convertible Bond due 2012, EUR 83.9 million indebtedness
outstanding under our Convertible Bond due 2014 as well as EUR 154.0 million under our Convertible Bond due
2017 and EUR 148.7 million indebtedness outstanding under our Promissory Notes, net debt was EUR 227.3 million
at March 31, 2011.
Of the bank borrowings shown in the table above, a total of EUR 26.4 million was secured through mortgages
as of March 31, 2011. These amounts mainly relate to long-term borrowings to finance investments into property,
plant and equipment by our Swiss subsidiaries and Becker Stahl Service Group. Under the ABS Programs, we sell
the trade receivables of operating companies in the participating countries on an ongoing basis to special purpose
companies. The book value of the gross trade receivables that our participating subsidiaries had sold under our ABS
73

Programs as of December 31, 2010 amounted to EUR 386 million (EUR 293 million as of December 31, 2009). This
compares to a utilization of the European and U.S. ABS Programs of EUR 20.0 million and USD 91.0 million,
respectively, as of December 31, 2010. The special purpose companies pass on collections from the sold trade
receivables in excess of the utilization amounts.
We are a holding company with no source of operating income. We are therefore dependent on our ability to
raise capital, dividend payments from subsidiaries and payment on intercompany loans to generate funds. The terms
of our outstanding debt contain a number of significant covenants that restrict our ability, and the ability of our
subsidiaries to, among other things, pay dividends or make other distributions, make capital expenditures and incur
additional debt and grant guarantees. See “Material Agreements”. Furthermore, the ability of our subsidiaries to
pay dividends and make other payments to us may be restricted by, among other things, other agreements and legal
prohibitions on such payments. In particular, future drawings under the Senior Revolving Credit Facility will only
be available if, among other things, we meet the borrowing base requirements included therein, and future drawings
under the ABS Programs will only be available if, among other things, we are able to transfer enough qualifying
trade receivables to support such drawings. Both the Senior Revolving Credit Facility and the ABS Programs can
only be used for the financing of working capital. We believe that our cash flow from operating activities, together
with the borrowings under the Senior Revolving Credit Facility, bilateral facilities and ABS Programs, will be
sufficient to fund our working capital requirements, anticipated capital expenditures and debt service requirements
as they become due.
We believe that the potential risk to our liquidity is a reduction in our operating cash flow due to a reduction in
net income from our operations, which could result from, among other factors, downturns in our performance, the
industry or the economy as a whole. If there is a significant increase in sales volumes and/or average prices we may
not be able to finance the corresponding increase in inventory and trade receivables with our cash flow from
operating activities and other capital resources. In particular, the covenants under the Senior Revolving Credit
Facility and our other debt may limit our ability to draw down funds to finance our working capital. If our future
cash flows from operations and other capital resources (including borrowings under the Senior Revolving Credit
Facility, bilateral facilities and ABS programs) are insufficient to pay our obligations as they mature or to fund our
working capital and liquidity needs, we may be forced to:
reduce or delay our business activities;
sell assets;
obtain additional debt or equity capital; or
restructure or refinance all or a portion of our debt on or before maturity.
We cannot assure you that we would be able to accomplish any of these alternatives on a timely basis or on
satisfactory terms, if at all. In addition, the terms of our existing debt limit, and any future debt may limit, our ability
to pursue any of these alternatives.
Significant financial instruments
In 2005, we have centralized our group financing, and have since then continued to optimize our financing
structure according to our financing needs. In May 2010, we refinanced our Senior Revolving Credit Facility
established in 2007 and issued Promissory Notes (Schuldscheindarlehen) in an amount of EUR 145.0 million. Our
Group-wide ABS program provides for a European ABS Program (comprising our country operations in Germany,
France, the United Kingdom and the Netherlands as well as potentially also in Spain, subject to the fulfilment of
certain conditions precedent) of EUR 420.0 million and a U.S. ABS Program in an amount of USD 125.0 million as
of March 31, 2011. Under the terms of the Senior Revolving Credit Facility, the Company has agreed to procure that
the drawings under the ABS Programs when aggregated with the amount of priority debt (as further described
below) do not exceed an amount corresponding to 30 % of the total consolidated assets of the Klöckner & Co
Group. We also established a working capital facility in the United States. In connection with our acquisition of
Macsteel, our U.S. ABS program and our working capital facility in the United States were expanded. For further
details see “Material Agreements — Bilateral Credit Facilities of International Subsidiaries” and “— ABS
Programs”.
74

The material components of the Group’s financing structure as of March 31, 2011 were as follows:
Form of financing Total Availability
Drawn* as of
December 31, 2010
Drawn* as of
March 31, 2011
(in millions)
Convertible Bond due 2012 ...................... EUR325.0 303.2** 306.6**
Convertible Bond due 2014 ...................... EUR97.9 77.9*** 79.1***
Convertible Bond due 2017 ...................... EUR186.2 151.2**** 152.7****
Senior Revolving Credit Facility ................... EUR500.0 225.0 225.0
Promissory Notes .............................. EUR145.0 145.0 145.0
Swiss bilateral credit facilities .................... CHF341.6 28.8 28.7
U.S. bilateral credit facility ....................... USD100.0 0.0 5.5
European ABS Program***** .................... EUR420.0 20.0 82.6
U.S. ABS Program***** ........................ USD125.0 91.0 106.0
Other bilateral bank facilities ..................... EUR115.0 42.9 41.4
Finance leases ................................ EUR6.8 6.8 6.4
* Before deduction of financing costs and excluding interest accrued.
** Amount of Convertible Bond — Under IAS 39, convertible investments are split into a debt component and an equity component, which
is equal to the option value at the time of issuance. This results in an equity value of EUR 62.8 million of the Convertible Bond, which is
amortized over the life of the instrument and increases the initial debt component of EUR 262.2 million to the principal amount of
EUR 325.0 million (less any conversions).
*** Amount of Convertible Bond — Under IAS 39, convertible investments are split into a debt component and an equity component, which
is equal to the option value at the time of issuance. This results in an equity value of EUR 26.5 million of the Convertible Bond, which is
amortized over the life of the instrument and increases the initial debt component of EUR 71.4 million to the principal amount of
EUR 97.9 million (less any conversions).
**** Amount of Convertible Bond — Under IAS 39, convertible investments are split into a debt component and an equity component, which
is equal to the option value at the time of issuance. This results in an equity value of EUR 35.1 million of the Convertible Bond, which is
amortized over the life of the instrument and increases the initial debt component of EUR 151.5 million to the principal amount of
EUR 186.2 million (less any conversions).
***** Under the terms of the Senior Revolving Credit Facility, the Company has agreed to procure that the drawings under the ABS Programs
when aggregated with the amount of priority debt (as further described below) do not exceed an amount corresponding to 30% of the
total consolidated assets of the Klöckner & Co Group.
The use of our ABS Programs and credit facilities depends to a significant extent on our working capital needs.
Interest rate fluctuations can affect the amount of interest paid on existing debt as well as the cost of refinancing.
Senior Revolving Credit Facility
Our Senior Revolving Credit Facility in a committed amount of EUR 500.0 million is available to finance
working capital. The maturity was extended until May 2014 by a 100% majority of the syndicate banks (Extension
Option) with effect of May 3, 2011. As of March 31, 2011, EUR 225.0 million were drawn under this facility. The
Senior Revolving Credit Facility is not subject to performance-based covenants, but its utilization is limited to a
virtual borrowing base amount calculated based on inventories and trade receivables not used to cover the
utilizations under our ABS Programs. The documentation also includes maximum gearing and minimum equity
requirements. For a more detailed description of our Senior Revolving Credit Facility see “Material Agreements —
Senior Revolving Credit Facility”.
Promissory Notes
In the second quarter of 2010 Klöckner & Co Verwaltung GmbH issued Promissory Notes (Schuldscheindarlehen)
in the aggregate amount of EUR 145.0 million with terms until 2013 and 2015, respectively. Of the total
volume, EUR 39.0 million are fixed coupon instruments and EUR 106.0 million bear interest at a variable rate. The
Promissory Notes provide for the same balance sheet-oriented covenants as the Senior Revolving Credit Facility. In
the second quarter of 2011, Multi Metal Beteiligungs GmbH and Klöckner & Co SE as its legal successor issued
promissory notes in the aggregate amount of EUR 148.0 million. These promissory notes comprise fixed coupon
instruments in an amount of 34.0 million EUR and 114.0 million bearing interest at variable rates. The promissory
notes mature between 2015 and 2016. For a more detailed description of our Promissory Notes see “Material
Agreements — Promissory Notes”.
75

Bilateral facilities
Other than in respect of the Senior Revolving Credit Facility, further liabilities due to banks are comprised
exclusively of bilateral borrowings of subsidiaries, which are primarily used to finance working capital. As of
March 31, 2011, companies of the Klöckner & Co Group located in Switzerland, the United States, Eastern Europe,
the United Kingdom, Austria, Germany, Spain and France had bilateral lines of credit (including finance leases) in
an aggregate amount of approx. EUR 450.0 million, of which a total of EUR 73.8 million had been drawn on
March 31, 2011 (EUR 72.7 million on December 31, 2010). For a more detailed description of the bilateral facilities
see “Material Agreements —Bilateral Credit Facilities of International Subsidiaries”.
ABS Programs
Through our European and U.S. ABS Programs, we have access to additional funds to finance working capital.
The maximum aggregate capacity of our European ABS Program, which is available until March 7, 2013, is
EUR 420.0 million and its utilization as of March 31, 2011 was EUR 82.6 million. The maximum aggregate
capacity of our U.S. ABS Program as of March 31, 2011 was USD 125.0 million and its utilization as of March 31,
2011 was USD 106.0 million. We have agreed under our Senior Revolving Credit Facility to procure that the
drawings under the ABS Programs when aggregated with the amount of priority debt (as further described below)
do not exceed an amount corresponding to 30 % of the total consolidated assets of the Klöckner & Co Group. Our
ABS Programs do not include performance-based covenants or termination events based on financial leverage or
interest coverage. For a more detailed description of our ABS Programs see “Material Agreements —ABS
Programs”.
Net debt
In the light of higher prices and the positive trend in sales volumes which caused more funds to be tied up in
working capital and the resumption of acquisitions which required additional funds, our net financial debt increased
by EUR 286.5 million from a net cash position of EUR 149.6 million in 2009 to a net debt of EUR 136.9 million in
2010. Our financing structure limits our ability to reduce our gross debt. Our gross debt was EUR 1,071.8 million
and our cash and cash equivalents amounted to EUR 935.0 million as at December 31, 2010. The overall increase in
net working capital in the first quarter 2011 caused an increase in net debt by EUR 90.4 million from
EUR 136.9 million to EUR 227.3 million as of March 31, 2011.
Terms of Financial Obligations
The table below shows the terms of outstanding financial obligations and principal payments we would have
been obligated to make as of December 31, 2010 under our debt instruments, finance leases and other agreements
and obligations.
Under
1 year
*
1-5 years
More than 5
years *
December 31,
2010 *
(in millions of EUR)
December 31,
2010 **
Convertible Bond due 2012 .............. 2.1 ***
302.3 0.0 304.4 ****
Convertible bond due 2014 ............... 3.3 ***
76.7 0.0 80.0 ****
Convertible Bond due 2017 .............. 0.1 ***
148.8 0.0 148.9 ****
Senior Revolving Credit Facility ........... 1.0 ***
219.4 0.0 220.4 226.0
Promissory Notes ...................... 2.1 ***
144.4 0.0 146.5 147.1
Bilaterals and other bank borrowings ....... 28.8 29.5 7.6 65.9 65.9
Liabilities under ABS Programs ........... 0.1 ***
87.2 0.0 87.2 88.2
Finance leases ........................ 2.1 4.7 0.0 6.8 6.8
Total ............................... 39.6 1,013.0 7.6 1,060.2 1,071.8
* After deduction of financing costs.
** Before deduction of financing costs.
*** Represents accrued interest.
**** Debt component pursuant to IAS 39.
76
305.3 ****
81.2 ****
151.3 ****

The table below shows the terms of outstanding financial obligations and principal payments we would have
been obligated to make as of March 31, 2011 under our debt instruments, finance leases and other agreements and
obligations.
Under
1 year
*
1-5 years
More than 5
years *
March 31,
2011 *
(in millions of EUR)
March 31,
2011 **
Convertible Bond due 2012. .................. 3.3 ***
305.8 0.0 309.1 ****
Convertible Bond due 2014. .................. 4.7 ***
78.0 0.0 82.7 ****
Convertible Bond due 2017. .................. 1.3 ***
150.5 0.0 151.8 154.0
Senior Revolving Credit Facility ............... 2.4 ***
219.0 0.0 221.3 227.4
Promissory Notes .......................... 3.7 ***
144.5 0.0 148.2 148.7
Bilaterals and other bank borrowings. ........... 28.2 32.1 7.0 67.3 67.3
Liabilities under ABS Programs ............... 0.3 155.9 0.0 156.2 157.6
Finance leases ............................ 2.0 4.4 0.0 6.4 6.4
Total ................................... 45.9 1,090.1 7.0 1,143.0 1,155.2
* After deduction of financing costs.
** Before deduction of financing costs.
*** Represents accrued interest.
**** Debt component pursuant to IAS 39/IAS 32.
309.9 ****
Liabilities in connection with finance leases are recognized as liabilities in the amount of the cash value of
future lease payments.
Off-balance sheet arrangements and contingent liabilities
The Klöckner & Co Group has undertaken commitments in connection with agreements that are classified as
non-redeemable operating leases. Future payments arising from these lease agreements as at March 31, 2011 are
shown below:
Under 1
year 1-5 years
More than
5 years
March 31,
2011
(in millions of EUR)
Operating leases ............................. 52.3 112.0 55.0 219.3
Payments in connection with leases will be charged to the income for the corresponding year; as provided by
IFRS, future liabilities in connection with operating leases are not shown in the balance sheet. In addition, the
Klöckner & Co Group also had additional financial obligations of EUR 2.7 million arising from purchase
obligations for investments.
Pension Obligations
Various types of pension plans have been established for most employees of the Klöckner & Co Group,
depending on the legal, economic and tax environment of the respective jurisdictions. Most of our pension plans are
designed as defined benefit plans, either funded or unfunded.
The aggregate defined benefit obligations and plan assets of the funded plans in Switzerland, the United Kingdom,
The Netherlands and the United States for the period ended December 31, 2010 amounted to EUR 565.4 million and
EUR 546.0 million, respectively, resulting in a funded status of negative EUR 19.4 million. As of December 31, 2009,
defined benefit obligations of EUR 454.1 million stood against plan assets of EUR 442.8 million (i.e., funded status of
negative EUR 11.3 million). The decline of the funded status was largely a consequence of lower interest rates to be
applied to calculate the pension obligations which resulted in higher obligations. This effect over compensated the
increase in the fair value of plan assets. Accordingly, the funding level (i.e., plan assets at fair value as a percentage of
defined benefit obligations) for funded plans as of December 31, 2010 fell from 97.5 % as of December 31, 2009 to
96.6 %. Under consideration of unrecognized net gains and losses and unamortized prior service cost, the total provision
for such plans amounted to EUR 16.0 million. Furthermore, prepaid pension costs of EUR 23.3 million were recorded.
For the remaining largely unfunded plans, including Germany and France, the total defined benefit obligations
as of December 31, 2010 amounted to EUR 170.2 million, which amount compares to plan assets of only
EUR 9.5 million (i.e. a funded status of negative EUR 160.7 million). As of December 31, 2009, defined benefit
obligations of EUR 161.5 million stood against plan assets of EUR 7.5 million (i.e., funded status of negative
77
83.9 ****

EUR 154.0 million). For such plans recorded provisions amounted to EUR 158.4 million (December 31, 2009:
EUR 159.5 million). Furthermore, pension assets, largely reimbursement rights, of EUR 4.4 million were recorded.
In summary, as of December 31, 2010, the present value of all defined benefit obligations for funded and
unfunded plans was EUR 735.6 million, and the fair value of the corresponding plan assets of funded plans was
EUR 555.5 million, resulting in an overall funded status of negative EUR 180.1 million, up from negative
EUR 165.3 million in 2009. The total amount recognized in our financial statements for pension and other similar
liabilities was EUR 146.7 million which consists of provisions of EUR 174.4 million minus prepaid pension cost —
including reimbursement rights — of EUR 27.7 million.
The amount of our pension obligations was determined on the basis of actuarial assessments, and our actual
costs for benefits required to be paid may exceed these assessments. See “— Critical Accounting Policies” below.
Quantitative and Qualitative Information on Market Risks
In the normal course of business we are exposed to commodity, currency and interest rate risk.
Commodity risks
We are exposed to commodity risk only to a limited extent, because we buy and sell steel and other metals at
market prices and we do not enter into fixed price or long-term supplier contracts with producers or engage in any
speculative trading. In times of rapid steel price movements, however, we are exposed to the effects of metal price
changes on our inventory and our gross margin as well as cash flow. See “Risk Factors — Risks Related to Our
Business —Our financial condition and results of operations depend in large part on the prices for metals. These
prices are inherently volatile, and rapid price changes could materially and adversely affect our profitability and
cash flow.”
Currency risks
Our reporting currency is the euro. Preparation of the consolidated annual financial statements involves
translation of results denominated in other currencies into euro. We are exposed to a currency risk insofar as we
prepare our consolidated financial statements in euro while part of our assets, liabilities and sales, income and
expenses are not denominated in euro. Fluctuations in the values of these currencies (in particular the U.S. dollar,
the British pound and the Swiss franc) in relation to the euro can have a significant translation effect on our financial
condition and results of operations. We employ a centralized currency management exclusively for the purpose of
reducing translation risks. It is, however, for the most part possible to compensate for risks associated with
payments received in foreign currencies locally through the use of liabilities denominated in the respective national
currencies.
Interest rate risks
We are also exposed to interest rate risks. As of December 31, 2010, we had gross indebtedness of
EUR 1,072 million, of which approximately EUR 454 million was floating rate, of which in turn EUR 247 million
was hedged by fixed rates derivative instruments. The use of our ABS Programs and bank facilities depends to a
significant extent on our seasonal working capital needs. Interest rate fluctuations can affect the amount of interest
paid on existing debt as well as the cost of refinancing. If the U.S. dollar/euro interest rate levels as of December 31,
2010, had been higher by 100 basis points, the financial result for the following year would have been impacted
negatively by EUR 2,1 million. Significant portions of our financial instruments qualify as cashflow-hedges, the
effects of which are recorded in equity rather than in our income statement. If the U.S. dollar/euro interest rate levels
as of December 31, 2010, had been higher by 100 basis points, the financial effect would have led to an increase of
equity of EUR 7,0 million.
Critical Accounting Policies
The presentation and analysis of the results of operations, financial condition and net assets of the Klöckner &
Co Group are based on the consolidated financial statements for the years ended December 31, 2008, 2009 and 2010
and the interim consolidated financial statements for the three month period ended March 31, 2011. The underlying
financial statements were prepared in accordance with the respective applicable accounting methods and valuation
principles in compliance with IFRS.
The preparation of the consolidated financial statements requires the Klöckner & Co Group to apply
accounting policies and to make assessments, estimates and assumptions influencing the application of such
accounting policies and the reporting of assets, liabilities, income and expenses. Due to the inherent uncertainty in
78

such estimates and assumptions, the actual amounts may differ from these estimates. The estimates and the
underlying assumptions are reviewed on an ongoing basis. Adjustments to estimates are recognized in the period in
which the estimate is revised, if the change affects only that period or in the period of the revision and subsequent
periods if both periods are affected. Estimates are particularly necessary for the valuation of intangible assets (e.g. in
purchase price allocations), the recognition and measurement of deferred tax assets, the accounting for pension and
other obligations as well as for impairment tests in accordance with IAS 36. Further information on critical
accounting policies is provided in Note (4) to the consolidated financial statements included elsewhere in this
prospectus. The most important critical accounting policies are summarized below.
Business combinations
Business combinations are accounted for under the purchase method whereby the cost of the investment is
offset against the investee’s net assets which are remeasured to fair value. The net assets are based on the fair values
of the assets and liabilities, including identifiable intangible assets and contingent liabilities to be recognized as
liabilities, as of the date of acquisition. If published exchange or market prices cannot be obtained for allocating the
purchase price, the fair values are calculated on the basis of suitable valuation techniques. Generally, the discounted
cash flow method is used in such cases. Under this method, the expected future cash flows that can be generated by
the asset are discounted to the date of the initial consolidation using a discount rate reflecting the inherent risk
associated to the asset. Any remaining excess of the cost of the acquired company over its proportional share of net
assets is recognized separately as goodwill; any negative difference is upon reassessment of the acquired assets and
liabilities directly recognized in the income statement. Subsequent changes in interests in consolidated subsidiaries
that do not result in a loss of control are treated as equity capital transactions.
Revenue recognition
Revenues from sales of goods are recognized when the material risks and rewards associated with ownership
have been transferred to the buyer and the amount of revenues can be reliably measured. This is generally the time
of delivery. Prior to delivery, revenues are only recognized when goods have not been delivered at the request of the
buyer but ownership has been transferred and the buyer has accepted billing. Sales are reported net of allowances
such as bonuses, trade discounts and rebates.
Share-based payment
The Group’s share-based compensation plans are virtual stock option plans with cash settlement. As of the
respective reporting date, a provision is recognized pro rata temporis in the amount of the fair value of the payment
obligation; any subsequent change in the fair value is recognized in profit or loss. After the expansion of the
program the fair value of the virtual share options is calculated on the basis of an option pricing model based on a
Monte Carlo simulation using the following parameters:
March 31, 2011 December 31, 2010
% %
Risk-free rate of return ................................ 1.3-2.9 0.6-2.6
Expected volatility ................................... 37.0 39.0
Deferred taxes
Deferred taxes are calculated in line with the concept of the balance sheet liability method. Deferred tax assets
result from temporary differences in the carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable profits and from consolidation
entries. Such deferred tax assets or liabilities are not recognized if the temporary differences arise from goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
neither affects taxable profits nor accounting profits. A deferred tax asset is also recognized for the carry forward of
unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused
tax losses can be utilized.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow part of or the entire deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each
balance sheet date and a previously unrecognized deferred tax asset is recognized to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are calculated using tax rates that have been enacted or substantively enacted
by the balance sheet date. The measurement of deferred tax liabilities and deferred tax assets reflects the tax
79

consequences that would follow from the manner in which Klöckner & Co expects, at the balance sheet date, to
recover or settle the carrying amount of its assets and liabilities.
Intangible assets
Intangible assets with finite useful lives are carried at cost less accumulated amortization if the use of the asset
entails an economic benefit and the costs of the asset can be reliably determined. Intangible assets are amortized on
a straight-line basis in line with their estimated useful life over a period generally between two and 15 years. The
useful life is reviewed annually and future expectations are adjusted if necessary. Intangible assets with an indefinite
useful life that are not being amortized are reviewed for impairment annually or more frequently if indications for
impairment arise.
Impairment
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to
determine if there is any indication of impairment. If such indication exists, the recoverable amount of the asset is
estimated to determine the extent of the impairment loss. The recoverable amount is the higher value of the fair
value less costs to sell and the value in use. In those instances in which the recoverable amount for the specific asset
cannot be estimated, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is
increased to the extent that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years. A
reversal of an impairment loss is recognized immediately as income.
Goodwill arising from the acquisition of subsidiaries is tested for impairment at least annually. The impairment
test is performed at the level of the cash-generating unit to which the goodwill has been assigned. Cash-generating
units are the lowest reporting level in the Group at which management monitors goodwill for internal reporting
purposes. For the Klöckner & Co Group the national sub-consolidation groups generally represent the cashgenerating
units. The annual impairment test for goodwill is performed in the fourth quarter of each financial year,
or more frequently when there is an indication that the unit may be impaired. If the carrying amount exceeds the
recoverable amount, an impairment loss is recognized in the amount of the difference and cannot be reversed in
subsequent periods.
The recoverable amount is the higher value of fair value less cost to sell and value in use. Value in use or fair
value less cost to sell is usually determined using a discounted cash flow approach. The estimated cash flows are
based on the Company’s current business plan for the following three years, based on management’s estimates for
the respective business unit. The interest rates used reflect the risk specific to the underlying business and the
country in which the business is operated.
Impairment losses are reported in the income statement under impairment losses. Reversals of impairment
losses are included in other operating income.
Inventories
Inventories are stated at the lower of cost and net realizable value. Of the inventories recognized as of
December 31, 2010 and 2009 of EUR 898.8 million and EUR 570.9 million, EUR 341.5 million and EUR 284.1 million
are stated at net realizable values, respectively. Allowances to adjust cost to net realizable value amounted to
EUR 44.0 million as of December 31, 2010 and EUR 71.0 million as of December 31, 2009.
The manufacturing costs comprise production-related costs calculated on the basis of normal capacity. In
addition to the directly attributable costs, materials and production overhead expenses including depreciation are
reflected in the manufacturing costs. Cost is generally assigned to inventories on the basis of the monthly moving
average method. In selected cases the specific identification method is applied.
Financial instruments
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Loans and receivables are measured at amortized cost using the effective interest method. Also assigned to
this category are non-current loans and non-current securities that do not have a quoted market price in an active
market, which are measured at amortized cost. Included in loans and receivables are trade receivables with amounts
of EUR 703.1 million and EUR 464.3 million net of allowances for doubtful receivables as of December 31, 2010
80

and 2009, respectively. All identified risks are allowed for by making appropriate valuation adjustments to reflect
the risk of default, taking into account the credit insurance that is in place. The carrying amounts of financial assets
are assessed for impairment if there is objective evidence, such as substantial financial difficulty on the part of the
obligor, knowledge of insolvency proceedings or being overdue. Allowances for doubtful trade receivables were
EUR 35.2 million and EUR 29.7 million for December 31, 2010 and 2009, respectively.
Derivative financial instruments
The Group uses a variety of derivative financial instruments to manage its exposure to interest and foreign
exchange rate risks. These include forward exchange transactions, currency swaps, cross currency swaps, interest
rate swaps and interest rate collars.
Derivative financial instruments are initially reported at fair value at the conclusion of the agreement. The fair
value is adjusted at each subsequent balance sheet date. Any gain or loss arising from a change in the fair value of a
derivative financial instrument that is not part of a cash flow hedging relationship and for which the hedging
relationship is effective (see below ‘‘— Hedge accounting/Cash flow hedges”) is recognized in the income
statement. For derivative financial instruments designated in a hedging relationship the timing of the recognition of
gains or losses is dependent on the nature of the hedge. The Klöckner & Co Group uses certain derivative financial
instruments to hedge recognized assets or liabilities. In addition, hedge accounting is applied for certain unrecognized
firm commitments.
Forward exchange transactions are valued on an item-by-item basis at the forward rate on the balance sheet
date, and exchange rate differences arising because of the contracted forward exchange rate are included in the
income statement.
Interest rate swap amounts from interest rate swap agreements are recognized in the income statement at the
payment date or the balance sheet date. In addition, interest rate swap agreements as well as interest rate caps are
carried at their fair value as of the balance sheet date, and, provided that no hedge accounting is applied, changes in
the fair values are recognized in the income statement for the current reporting period.
Derivative financial instruments designated in hedging transactions are classified as non-current assets or
liabilities if the remaining term of the hedging relationship is more than twelve months or as current assets or
liabilities, respectively, if the remaining term of the hedging relationship is less than twelve months. Derivative
financial instruments not designated in a hedging relationship are classified either as current assets or liabilities.
Hedge accounting/Cash flow hedges
Depending on volume, term and risk structure, the Klöckner & Co Group designates individual derivative
financial instruments as cash flow hedges.
The relationship between the hedged item and the hedging instrument including the risk management
objectives and the strategy for undertaking the hedge transaction are documented at the inception of the hedge.
In addition, at the inception of a hedging transaction and over its term, the Company regularly reviews and
documents whether the hedge is highly effective in terms of compensating the changes in the cash flows of the
hedged item.
The effective portion of the change in the fair value of derivative financial instruments designated as cash flow
hedges is recognized in equity; the ineffective portion is recognized directly in income or loss. The amounts
recognized in equity are reclassified to profit or loss in the period in which the hedged item is recognized in income.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or is no
longer deemed effective. Any cumulative gain or loss deferred in equity at that time remains in equity and is
recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no
longer expected to occur, the cumulative profit or loss deferred in equity is immediately recognized in income or
expense.
Provisions for pensions and similar obligations
Pension obligations arising from defined benefit plans are determined using the projected unit credit method.
The expected benefits, including dynamic components, are recognized over the total service period of the respective
employee. Actuarial advice has been obtained.
Actuarial gains or losses resulting from deviations between forecast and actual changes in plan beneficiaries as
well as actuarial assumptions that exceed 10% of the greater of the present value of the defined benefit obligation
and the fair value of plan assets are amortized over the expected remaining working lives of the participating
81

employees. Service costs are reported in personnel expenses, the interest costs in interest expense. Any surplus of
the assets over the liabilities to be recognized is limited to the cumulative, unrecognized, actuarial losses and past
service cost, plus the present value of any available refunds and the reduction of future contributions to the plan. Past
service cost is recognized immediately to the extent that the benefits are already vested, and otherwise amortized on
a straight-line basis over the average service period until the benefits become vested. Employer contributions made
by the Klöckner & Co Group to an independent entity under defined contribution plans and to which no further legal
or constructive payment obligations may arise are expensed as incurred.
Other provisions
In accordance with IAS 37 (Provisions, Contingent Liabilities and Contingent Assets), and with IAS 19
(Employee Benefits) if applicable, other provisions allow for all identified obligations and anticipated losses, as
well as all uncertain liabilities, provided they are present obligations and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligations, and that reliable estimate can be made of the
amount of the obligation. A provision is only established for legal or constructive obligation against third parties.
Provisions are recognized at the amount which represents the best estimate of the expenditure required to settle
the present obligation. Any reimbursement is treated as a separate asset and accordingly is not offset against the
provision. Where the effect of the time value of money is material, the amount of the provision is the present value of
the expenditure expected to be required to settle the obligation. The present value is calculated using interest rates
that reflect current market assessments and the risks specific to the liability.
Additional Information on our Unconsolidated Financial Statements for the Financial Year 2010
The annual financial statements of Klöckner & Co SE are prepared in accordance with the regulations of the
German Commercial Code and the Stock Corporation Act. Net income totalled EUR 47.4 million in 2010 compared
with EUR 31.2 million in the previous year. The balance sheet profit amounted to EUR 47.4 million in 2010
compared to EUR 17.7 million in the prior year. The income from investments of Klöckner & Co SE resulted from
dividends and profit transfers from subsidiaries passed through intermediate holding companies. In 2010, income
totalling EUR 62.2 million (2009: EUR 58.0 million) was received as a result of a profit-and-loss transfer agreement
with Multi Metal Beteiligungs GmbH and Becker Besitz GmbH. Other income and expenses, net improved from
negative EUR 31.9 million in the previous year to negative EUR 22.0 million in 2010.
82

Market Overview
The metal distribution market
INDUSTRY
As intermediaries between producers and purchasers of steel and metal products, metal distributors serve a key
role in the market. The producers of steel and metal products primarily sell their products in large quantities and
with long delivery times, while our end customers generally purchase smaller amounts and require product
customization with short delivery times. For example, in 2010, the average order size of our customers was less than
0.5 tons per item, while we believe that for our standard products steel mills typically do not deliver in order lots of
less than 10-25 tons per item and also typically require orders with six to ten weeks lead time. Metal distributors fill
this gap by purchasing large quantities of goods with long delivery times from steel producers and then offering
their customers short delivery times, smaller quantities, customized products and on-site delivery. At the same time,
metal distributors enable their customers to maintain low stock levels, because they provide the availability of
inventories on short notice. Some producers also sell small shares of their production through their own distribution
channels. In addition to the sale of metal products, metal distributors offer various value-added processing services
such as cutting-to-length, longitudinal cutting, priming and bending.
Metal distributors are important customers of steel producers, representing a significant proportion of their
sales. Large distributors such as the Klöckner & Co Group can achieve strong buying power by aggregating the
demand from their customers and purchasing centrally. To provide for a steady supply of various metal products to
their customers, metal distributors generally source from a number of primary producers, both large and small. In
2010, according to our own estimates, the ten largest steel producers in Europe and North America accounted for
approximately 67% and 78%, respectively, of the respective regional production, with many smaller mills
accounting for the remainder.
The characteristics of the steel distribution industry include:
servicing of small or mid-sized customers;
enabling customers to efficiently manage working capital;
providing products in customized quantities rather than mill-sized quantities;
providing just-in-time delivery to customers who are unable or unwilling to store large volumes of inventory;
distributors having stronger buying power than individual small customers;
value-added processing;
enabling small customers to outsource customized processing needs;
one-stop shopping;
diverse products from multiple producers; and
the ability to adjust product mix to changing trends.
The end markets served by metal distributors are well diversified, with no single market dominating sales.
Metal distributors typically have a large number of small industrial and service customers and, as a result, their
demand is determined by a diversified set of customers.
The metal distribution industry operates at the local level with distribution centers located in close proximity to
their customers’ facilities. This allows distributors to stock inventory based on local demand. Because the industry
operates on a local level and is characterized by small order sizes, main drivers of competition include service and
availability, in addition to pricing.
Steel service centers (SSCs) provide additional services beyond those provided by distribution centers. Flat
rolled SSCs convert coiled flat steel into sheet and slit coil products that can be used directly in manufacturing
processes such as stamping or metal forming. SSCs typically serve customers in industrial sectors with a regional or,
in the case of the automotive industry, international, focus. Outside the automotive industry, customers can be found
in a broad range of sectors such as machinery and equipment manufacturers, appliances and furniture manufacturers.
The majority of the sheet and slit coil products are manufactured according to a customer’s specific
dimensions. SSC products are typically directly linked to their customers’ manufacturing process which is reflected
in long-term customer volume agreements. SSCs also serve general line steel distributors that do not have decoiling
facilities themselves. These customers source standard sized sheet products from SSCs. In addition to the cutting
83

and slitting of flat rolled steel coils, SSCs offer a range of add-on services such as leveling, surface treatments and
surface protection. Mill independent SSCs buy large quantities from various steel mills typically based on a longer
term contract generally aligned to their own customers’ terms. Flat steel mills often also operate their own SSCs that
typically cater to large OEMs or tier one customers with larger lot sizes of repetitive products. Compared to steel
distributors, SSCs have higher share of value add due to the cutting and slitting processes but are generally also
more assets intensive. The higher share of value added, the rather contract related customer and supply agreements
with manufacturing oriented customers typically result in lower business and earnings volatility when compared
with steel distributors.
Steel is the most widely used metal in Europe and North America. In line with the broader market, we
generated approximately 78.1% of our 2010 sales from steel products. Given the importance of steel for us and our
markets, this Industry section focuses on the steel and steel distribution markets as opposed to the markets for nonferrous
metals.
The structure of the metal distribution market in Europe and North America
Although metal distributors serve largely the same role in both Europe and North America, the structure of
each market is somewhat different. The differences are largely attributable to the fact that the European market is
more consolidated and that the largest European metal distributors, with the exception of the Klöckner & Co Group,
are all owned by steel producers. In contrast, the North American market is more fragmented and distributors are
independent from the local producers (i.e., are not owned by them). Larger distributors in both markets benefit from
significant barriers to entry, including scale benefits in supply sourcing and comprehensive distribution networks
and established customer relations which would be difficult for new entrants to replicate.
Europe
In Europe, there are three distribution platforms: (i) direct sales in which the steel producer sells directly to the
customer, (ii) sales through steel service centers for flat products, and (iii) sales through warehousing distributors.
Both steel service centers for flat products and the warehousing distributors offer additional value-added
services vis-à-vis steel producers. Value-added services offered by warehousing distributors include services such
as longitudinal cutting, laser and plasma cutting, drilling/cutting-to-length, bending/dressing, sand blasting/coating
and metal forming. Steel service centers for flat products offer services that are more customized, such as slitting
and blanking.
Eurometal estimates the total market for steel products in the EU-27 countries at approximately 127 million
tons in 2010 (not including wire rod, rails and pre-material for tube production). According to Eurometal,
approximately 39% (about 49 million tons) of steel products are sold directly, mainly to large-scale customers, by
steel producers and approximately 22% (about 29 million tons) are sold indirectly, through steel service centers for
flat products and warehousing distributors. Eurometal estimates the relative market shares of warehousing
distributors at approximately 47% for small and medium sized independent distributors, approximately 38%
for mill-dependent distributors (such as ArcelorMittal, ThyssenKrupp or Corus) and approximately 15% for large
independent distributors (such as the Klöckner & Co Group), measured by turnover in tons.
North America
In North America, metal sales are either direct or indirect. Steel producers in North America are not active in
indirect sales (i.e., distributors in North America are generally not owned by the steel producers). Steel producers in
North America either deliver directly to the customer or to an independent service center. In North America, the
service centers handle all indirect sales — both the business that is handled in Europe by service centers for flat
products and the business handled by warehousing distributors. No distinction is made in the United States between
steel service centers for flat products and warehousing distributors.
The total steel consumption in North American steel products in 2010 is estimated by World Steel Association
at 80.1 million tons. Service centers (i.e., indirect distribution companies) accounted for approximately 40%
(32 million tons). The remaining 60% were sold directly by steel producers to customers (source: MSCI).
According to Steel Business Briefing, the total market value for service centers was estimated at USD 108 billion
for 2009, of which the five largest distributors had a market share of about 15%.
84

Competition
Europe
We are the largest producer-independent steel and metal distributor in Europe measured by sales in 2010
(source: Eurometal). We believe we are among the three largest warehousing multi-metal distributors in the
European countries where we are active. The two largest metal distributors in Europe are owned by steel producers.
We estimate that ThyssenKrupp is the largest distributor, followed by ArcelorMittal with us in third place. There are
a total of about 3,000 metal distributors in Europe, most of which are substantially smaller than the Klöckner & Co
Group and have very limited distribution networks and comparably limited product offerings. Some of these smaller
competitors offer special niche products.
North America
In the United States, we believe that we are among the leading distributors of heavy carbon steel, our main
focus in this market, and the tenth-largest warehousing multi-metal distributor overall – giving effect to the
acquisition of Macsteel we believe we are the third-largest warehousing multi-metal distributor. We have achieved a
broad geographic reach following our recent acquisitions, mainly of Primary Steel LLC in May 2007 and the
distribution business of Temtco Steel in May 2008, and of Angeles Welding and Lake Steel Ltd. in 2010. For the
acquisition of Macsteel see “Business —The Acquisition of Macsteel”. The market in North America is less
concentrated than the European market, with more than 1,000 market participants (source: Steel Business Briefing).
The largest multi-metal distributor in the United States is Reliance Steel & Aluminum Co, which is predominantly
active in North America.
Customers
The largest metal distributors have several thousand customers. These customers are usually small to mediumsized
industrial companies spanning most industrial sectors that use steel and require deliveries of small order sizes
at short notice. By contrast, large-scale customers (e.g., manufacturers of cars and trucks or white goods as well as
shipyards) generally acquire the steel they need by purchasing it directly in large quantities from steel producers or
steel service centers. The most important markets for metal distributors are the construction, industrial machinery
and equipment industries, on-sellers and appliances/durable goods manufacturers.
Suppliers and Distribution
In contrast to the mill-tied distributors, independent metal distributors such as the Klöckner & Co Group are
free to select their suppliers on the basis of price and other considerations. Since we are a major purchaser of steel,
we are usually given preferential treatment in the delivery of goods and receive better purchasing conditions than
smaller competitors. Most of the mill-tied distributors are, in our view, generally strongly tied to a specific steel
producer and can generally only purchase steel products from a competing steel producer if a specific product is not
available at the steel producer that they are tied to. For more information on our suppliers, see “Business —
Procurement”.
Steel Volumes
Dependence on general economic development
In the metal distribution market, growth is largely determined by customer demand for steel products. The
development of gross domestic product is an indicator for the future demand for steel, since the consumption of steel
generally increases when the economy grows and decreases when the economy declines.
Demand for steel
Historically, demand for steel in the EU-15 countries and North America has been relatively stable with
relatively low cyclicality. In recent years, however, the global demand for steel intensified — mainly as a result of
the increased demand in China — while the demand in the EU-15 countries and North America has remained fairly
constant. Throughout the large part of 2008, steel mills operated at their capacity limits. The global economic crisis
has resulted in a sharp drop of steel consumption and production worldwide. According to various reports, average
utilization levels in North American and European steel mills in 2009 have dropped dramatically to less than 50%.
In 2010 and 2011 utilization levels have increased again; we estimate that they have reached at present approximately
75% in North America and 50% to 80% in European countries.
85

Demand for steel products is influenced by customers’ expectations in respect of future price and economic
developments. For example, in times such as the economic crisis, customers tend to reduce their stock levels,
thereby further reducing demand below the already depressed levels. Conversely, in times of improved economic
activity and rising prices, some customers increase stock levels in anticipation of further price increases and/or
increasing business activities, thereby further increasing demand for steel products. Sales volumes can therefore
show strong fluctuations from year to year.
Steel Prices
Steel and metal prices are subject to cyclical price movements that are difficult to foresee, as demonstrated by
the rapid increase, followed by an even more drastic fall, of steel prices in late 2008, which continued well into
2009. In May 2008, hot rolled coil (“HRC”) prices in the U.S. marked a peak of approximately U.S. dollar 1,100 and
fell drastically to approximately U.S. dollar 390 in mid 2009. Since then, steel prices for HRC have increased to a
level of U.S. dollar 600 to 700 in 2010. In late 2010 and the beginning of 2011, U.S. HRC prices have started to rise
again significantly to a level of almost U.S. dollar 900 at the end of the first quarter of 2011. Steel prices will
continue to remain unpredictable in the future.
Consolidation
Prior to the economic crisis, there has been a clear trend towards consolidation of steel producers on a global
level. As a direct consequence of that consolidation, steel producers in North America and Europe have reacted
more quickly to the sudden drop in demand in the fourth quarter of 2008 and reduced capacity in a more disciplined
fashion than in previous downturns.
We believe that larger distributors such as the Klöckner & Co Group will have certain competitive advantages
over smaller, local distributors, due to more efficient sourcing, their greater ability to optimize inventories and direct
access to the capital markets.
86

Overview
BUSINESS
We are the largest producer-independent steel and metal distributor in the combined European and
North American markets measured by sales (source: Eurometal and our market data aggregation based on
2010 sales). In Europe, we are among the three largest warehousing multi-metal distributors measured by sales,
including competitors that are controlled by steel or metal producers (source: Eurometal). In the United States,
measured by sales, we believe that we are among the leading distributors of heavy carbon steel, our main focus in
this market, and the tenth-largest warehousing multi-metal distributor overall. After giving effect to the acquisition
of Macsteel, one of the leading service center companies in the United States, we believe we are the third-largest
multi-metal distributor and steel service center in the United States. We operated from 246 distribution locations in
15 countries throughout Europe and North America and had 9,699 employees as of December 31, 2010. Through
our recent acquisitions, we have increased our steel service center activities focused on the automotive, and
engineering sectors, thereby increasing our value added services with higher margin potential. Moreover, steel
service centers include customers that enter into longer term master agreements providing for more stability in our
business.
Our main business is the distribution of steel products including service center activities (78.1% of total sales
in 2010) and aluminum products (7.2% of total sales in 2010). We act as a link between producers and
manufacturing customers and our position as a producer-independent supplier allows our customers to benefit
from centrally coordinated purchases and from our broad local and global procurement capabilities. We purchase a
range of steel and aluminum products from the producers in bulk, warehouse these products and sell and deliver
them in smaller lots in accordance with our customers’ needs. We offer various value-added services, including
cutting-to-length services, plasma cutting, shot-blasting, priming and bending, in particular through our increasing
steel service center activities. In a number of our markets, we also distribute products other than steel and
aluminum, such as non-ferrous metals and tools and industrial hardware, which in aggregate represented 14.7% of
our total sales in 2010. We sell most of our products through our distribution locations. To a limited extent, we also
arrange for direct sales, which involve direct shipment of products from the metal producer to our customers. Direct
shipping accounted for approximately 10.8% of our sales in 2010. We usually buy and sell steel and other metals at
market prices and have historically been able to pass on changes in market prices to our customers. Our sales are for
the most part done on a spot basis and when we enter into long-term fixed price supply contracts with producers, we
generally have corresponding sales commitments and do not engage in speculative trading.
We have more than 170,000 active customers who have purchased from us during 2010. None of our customers
accounted for more than 1.5% of our total sales in 2010. Our customers are mainly small and medium-sized steel
consumers (and some larger customers in our steel service center business) in diverse industry sectors, such as
construction, industrial machinery and equipment, on-sellers, appliances/durable goods manufacturers and
automotive.
The following charts illustrate the breakdown of our sales in 2010 by country, product and customer group:
SALES BY COUNTRY
1.4%
4.5%
5.6%
7.6%
17.1%
15.5%
29.0%
19.3%
87
Germany/Austria
France/Belgium
Switzerland
United Kingdom
Spain
The Netherlands
Eastern Europe
United States

SALES BY PRODUCT
7%
8%
9%
15%
SALES BY CUSTOMER GROUP
6.5%
10%
11%
10.5%
23%
35%
26%
39%
Long products/sectional steel
Flat products
Tubes
Quality steel/stainless steel
Aluminum
Other
Construction industry
Industrial machinery and equipment
On-sellers
Appliances/durable goods manufacturers
Automotive
We hold a wide range of inventory and are able to deliver on short notice flexible order sizes of products
customized to our clients’ needs. This readily available inventory allows for one-stop shopping and, together with
the reliable and timely delivery of products made possible by our extensive geographical distribution network,
results in strong and loyal relationships with our customers, the majority of whom are repeat customers. With our
acquisition of Becker Stahl in 2010, we added what is in our opinion the largest single-site steel service center in
Europe to our distribution network with high flexibility to deliver on short notice almost all specifications covered;
we also increased our purchasing power for flat steel significantly and diversified our customer base, thereby
reducing the share of the construction industry. With our acquisition of Macsteel we will expand our business in the
United States currently focused on long and plate products with a broad range of sheet and slit coil flat rolled steel
service center products. We believe that the acquisition will in particular support our strategy to expand the flat steel
product steel service center business with industrial customers.
Historically, we have generally been able to pass on changes in market prices to our large and diverse customer
base that is traditionally more focused on readily available inventory and reliable as well as timely delivery of
flexible order sizes. Moreover, each of our distribution locations adapts its product and services offering to the
requirements and demands of the local markets. For example, in our distribution locations in Switzerland we offer a
wide range of hardware products to relatively small construction and mechanical engineering businesses, whereas
in the United Kingdom, we offer special steel sections, known as cellular beams, to address specific construction
practices in this market.
Our suppliers include large steel and metal producers such as ArcelorMittal, Corus, ThyssenKrupp, Nucor and
Alcoa, as well as regional, specialized steel producers such as Riva/Ilva, Celsa, Corrugados Gallardo and Gerdau
Ameristeel. As an independent metal distributor, we are able to optimize our purchasing strategy independently and
have the flexibility to source from a variety of steel and metal producers. In addition, we believe that our relatively
large size, when compared to local and regional multi-metal distributors, provides us with a competitive advantage
because we are generally able to negotiate volume discounts and improved payment terms with the steel and metal
producers. We believe that we are an important customer for steel and metal producers because we account for a
significant portion of these producers’ sales. At the same time, we are an important part of the distribution network
for steel and metal producers, as we reach a customer base that steel and metal producers do for the most part not
target directly, given our customers’ needs for intermittent deliveries of small quantities of customized products.
Our customers also value our ability to deliver products on short notice as metal producers generally have much
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Other

longer delivery times. This includes steel and metal producers with their own distribution operations, whose
production capacity exceeds the capacity of their own distribution networks and their direct sales combined.
We buy and sell steel and other metals at spot market prices. Price fluctuations can affect operating results,
gross profit (sales plus change in inventory and other own work capitalized, less cost of materials), EBITDA, net
working capital and cash flows. When we realize sales, our gross profit is calculated based on cost of materials that
are determined by using the weighted average cost method for the respective inventory sold. When metal prices
change, we will record a gain or a loss, as the price realized in sales will no longer match our weighted costs due to
the time lag between the purchase of inventory and the sale of products. At the end of each reporting period, we
value our inventory at the lower of weighted costs or net realizable value. These valuation adjustments also have an
effect on our gross margin. Metal price changes may affect both our profitability and our cash flow. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Material factors
affecting our results of operations —Metal prices”:
Our History
On June 28, 1906, Peter Klöckner founded the “Klöckner & Co” trading company in Duisburg, Germany.
Multi-metal distribution has remained the core competence of Klöckner & Co through our more than 100 years of
history, although Klöckner & Co occasionally also distributed crude oil, chemicals and building materials, was
active in transportation and established industrial plants around the world. Klöckner-Werke AG (founded by Peter
Klöckner in 1923) and Klöckner Humboldt Deutz AG were closely connected with Klöckner & Co for many years.
Today Klöckner-Werke AG and the former Klöckner Humboldt Deutz AG (currently Deutz AG) are legally and
economically independent and have no corporate relationship with the Klöckner & Co Group.
After several ownership changes since the 1980s, the Klöckner & Co Group was eventually acquired in 2005
by an investment vehicle ultimately controlled by Lindsay Goldberg & Bessemer, a private equity investor. In June
2006, following our IPO, the Klöckner & Co shares were admitted for trading in the Prime Standard sub-segment of
the Frankfurt Stock Exchange. In January 2007, our shares were included in Deutsche Börse’s MDAX index. Since
April 2007, following the sale of the remaining shares held by Lindsay Goldberg & Bessemer, all of our shares have
been held in free float (Deutsche Börse AG has in the past assigned shares held by Norges Bank not to free float
according to its own policies). Based on notifications according to the German Securities Trading Act received in
2010 and 2011, Norges Bank (Central Bank of Norway) is holding 1.84% of our shares, and Amundi S.A holds
3.03% of our voting rights.
Since 2006, we have completed 22 acquisitions (2010: 4; 2009: 0; 2008: 3; 2007: 11; 2006: 4) in the
United States, the United Kingdom, Germany, France, The Netherlands, Spain and Switzerland. Major acquisitions
included the purchases of Becker Stahl in Germany in 2010, followed by Primary Steel LLC in May 2007, and the
distribution business of Taylor Equipment and Machine Tool Corporation (business name: Temtco Steel) in May
2008. These acquisitions helped us to significantly expand our product and service offering as well as our
geographic reach in the United States. In addition, we have increased our shareholdings in our subsidiaries
Debrunner Koenig Holding AG in Switzerland (to 100%) and Klöckner Metalsnab AD in Bulgaria (to 99.77%). In
2011, we have to date agreed terms for two acquisitions; see “—The Acquisition of Macsteel”; and “—The
Acquisition of Frefer”. At the same time, we further increased our focus on our core activities by divesting non-core
activities such as the fastening systems business in Switzerland (completed in September 2008) and the processing
business in Canada (completed in July 2008).
Since the IPO in 2006, Klöckner & Co has transformed itself significantly. The implementation of our business
optimization initiatives has resulted in stronger central control of our business, especially in the area of purchasing,
product management and IT. More recently, we have launched initiatives to optimize and harmonize processes in
logistics and warehousing operations. In our opinion the responsive and tight net working capital management
during the financial crisis is an evidence of our optimization process. Our continuous acquisition activities have also
had a significant impact on our business, reinforcing our market position in Europe and strongly expanding our
footprint in the United States especially in the area of plate products and, with the acquisition of Macsteel, also in
the area of flat rolled steel service center business. Including Macsteel we believe that we are among the top three
metal distributors in the United States. In 2011 we entered the Brasilian market through the acquisition of Frefer, a
large metal distributor. With the acquisitions of Becker Stahl and Macsteel we have also expanded our steel service
center activities substantially, which we believe will result in a more balanced and stable business model. At the
same time, we have been able to reduce our dependency on the construction industry. Becker Stahl also acts as a
supplier to our German subsidiary KSM that historically sourced services from third party steel service centers
(including Becker Stahl). We plan to continue this transformation process via our Klöckner 2020 strategy outlined
below.
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Our Strengths
Largest producer-independent steel and metal distributor in the combined European and North American
markets
As the largest manufacturer-independent steel and metal distributor in the combined European and
North American markets and among the Top-3 distributors in the core European market where we are active,
we believe that our size provides us with significant competitive advantages over smaller competitors. Our
extensive geographic network of 246 distribution locations as of December 31, 2010 enables us to offer rapid and
reliable delivery of our broad range of products and services, which allows our customers to turn to us for one-stop
shopping for their metals requirements. Our customers typically value the fact that they can source all the products
(flat and long steel products, aluminum, stainless, etc) they need from a single location. While our centralized
sourcing enables us to obtain attractive volume discounts and improved payment terms from suppliers, we believe
that the size of our distribution network with its central, regional and specialty distribution locations gives us an
advantage over smaller competitors due to our ability to centralize stocks of less frequently requested products,
thereby reducing overall stock levels without compromising the availability of products. In addition, we believe that
our independence from steel producers enables us to be more flexible than mill-tied distributors and better able to
react to changes in supply and demand in the marketplace, as we can source products from a variety of suppliers. At
the same time, we are an important customer for many of our suppliers, including steel and metal producers with
their own distribution operations, whose production capacity exceeds the capacity of their own distribution
networks and their direct sales combined.
Broad and diversified customer bases in Europe and North America
We have more than 170,000 active customers who purchased from us during 2010 in the 15 countries in which
we operate in Europe and North America. These customers are mainly small and medium-sized businesses, with an
average order size of approximately EUR 1,200. In 2010, no single customer accounted for more than 1.5% of our
total sales. We believe that in particular our smaller customers are generally less price-sensitive than large industrial
users of steel that purchase directly from the steel producers (although the financial crisis has led to increased price
sensitivity of our customers, too). Our customers are involved in a wide variety of industries, such as construction,
industrial machinery and equipment, on-sellers, appliances/durable goods manufacturers and automotive. Through
the acquisition of Becker Stahl in 2010 we have diversified our industry split and increased the share of automotive
while the share of the construction industry, which has been severely hit by the financial crisis, has decreased. The
acquisition of Becker Stahl also added a significant steel service center presence to our operations. We believe that
the diversity of the geographies and the relatively wide range of industries in which we operate and of our customer
base make us less vulnerable to regional or industry-specific downturns.
Flexible business model in different economic cycles
We buy steel and other metals in bulk at market prices and have generally been able to pass on price increases
to our customers to whom we sell and deliver our inventories in smaller lots. Our large and diverse customer base
primarily values service and availability in addition to pricing. Since we have only limited long-term purchase
commitments, we can better adjust our sourcing and inventory volumes to reduced demand as we did during the
economic crisis in 2008 and 2009. During that period, we significantly reduced our operating costs and our net
financial debt. Among other measures, we reduced our total headcount. We believe that these actions have put us
into an advantageous competitive position.
Historically, we have been able to generate considerable cash flows and maintain a strong liquidity position
during periods of falling demand and steel prices. Steel price decreases result in price driven losses in our
inventories, but also in a reduction of our net working capital requirements due to the lower replacement cost of
inventories and the lower volume of trade receivables. As a result, we generate high cash flows and enjoy a strong
liquidity position at least for a significant period of time while steel prices are falling. For instance, since the
beginning of the fourth quarter of 2008 until December 31, 2009, a period of rapidly falling steel prices, we reduced
our working capital levels by EUR 1.083 million, or 63%, to EUR 637 million, which together with a capital
increase in September 2009 enabled us to build up a cash balance of EUR 149.6 million, all as of December 31,
2009. By contrast, in 2010 and the first quarter of 2011, higher steel prices and an increase in overall sales volumes
led to an increase in working capital with further capital used to fund our acquisitions. While part of these funding
requirements were covered by a rising operating cash flow from improved earnings, net debt increased to
EUR 136.9 million as of December 31, 2010.
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Unlike a steel producer, we do not operate extensive production facilities and our comparatively low capital
expenditure requirements and more flexible business model enable us to adapt more easily to a challenging
environment such as the economic crisis in 2008 and 2009.
Our capital structure benefits from a relatively strong equity position of 34.9% of total assets as of March 31,
2011, diverse sources of working capital and other debt financing and the absence of performance based covenants
from our Senior Revolving Credit Facility and ABS Programs. We believe that our comfortable capital base giving
effect to this offering will position us well to take advantage of growth opportunities through acquisitions and to
finance increased working capital requirements as economic conditions have improved.
Experienced and proactive management with strong track record
We believe that we have a dedicated, ambitious, loyal and competent management team with substantial
experience in the multi-metal distribution business as well as other relevant industry experience. In years of growth,
our management team has demonstrated its ability to follow a disciplined acquisition strategy and since 2006
successfully acquired and integrated several new businesses. Since our IPO in 2006, our management team has also
proven its capability by successfully implementing various restructuring programs which achieved significant cost
reductions and optimized inventory management and sourcing strategies. For example, our management team sold
the Canadian business Namasco in May 2008 (the transaction closed in July 2008), quickly responded to a
challenging economic environment by initiating an immediate action program in October 2008 and expanding it in
March 2009 with the goal of reducing operating costs and net financial debt as well as retaining flexible financing
resources and liquidity. We also successfully restructured our Senior Revolving Credit Facility and our European
ABS program by eliminating performance based covenants, executed a capital increase in difficult market
conditions in 2009 and issued another long term convertible bond in 2010.
Well positioned for future growth
We believe that Klöckner & Co is well positioned for future growth opportunities in our established, and in
prospective new markets. In our established markets, especially in Western Europe and the United States, we have
in our opinion significant potential opportunities for growth over the next years. We expect the steel markets in these
two regions to continue to recover and to display growth rates ahead of general gross domestic product (GDP)
growth rates. We have implemented a lower cost base and leaner structures through our restructuring during the
crisis in 2009, which together with our strong balance sheet following our capital market activities, has in our
opinion improved our competitive position. We believe that this positions us well to take advantage of the growth
opportunities compared to our smaller and less well capitalized competitors. We believe that our recent successful
acquisitions, such as Becker Stahl in 2010 with its focus on profitable and stable growth steel service center
activities, demonstrate the opportunities for fast and value-additive external growth in the current environment. The
acquisition of Macsteel in 2011 in the United States represents a further step to implement our acquisition strategy,
demonstrates our ability to act on market opportunities and we expect will further strengthen our position in the
US market through a broader product offering and a higher service proportion. Besides our established markets, we
see strong opportunities for growth in emerging markets and through our recent acquisition of Frefer, a Brazilian
metal distributor, made a first step into this area. We believe that these initiatives position us well to achieve our
strategic goal to develop Klöckner & Co into the first global multi-metal distributor.
Our Strategy
In October 2010, we unveiled our new long-term growth strategy, “Klöckner & Co 2020”. The upheaval
created by the financial crisis and the resulting changes in economic conditions made it necessary to adjust our
strategy that we had implemented largely without any changes since our IPO in 2006. The altered situation has
resulted in steel consumption rates significantly below their pre-crisis levels in industrialized countries for years
after the drastic collapse in 2009, while in developing countries, on the other hand, the growth trend has continued
virtually uninterrupted. Against this background, we have redefined our strategy, focusing on the potential for
further optimization. The strategy is based on the four pillars external growth, organic growth, business optimization
and management and personnel development, highlighting prospects and guidelines for the next ten years.
We want to develop Klöckner & Co into the first truly global multi-metal distributor. Subject in particular to
identifying and closing suitable acquisitions, our growth targets include doubling our sales volumes in five years
and tripling or quadrupling them by the year 2020.
External growth: In our slower-growth European core market, we will focus on acquiring companies with
higher-margin products, services, and customer segments, reducing our exposure to the construction industry. In
North America, we want to significantly expand our market share, including through major acquisitions. Our recent
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acquisition of Macsteel is an important step towards that goal. Long-term, we want to secure a high growth rate by
entering emerging markets, where we believe steel consumption will develop more dynamically than in established
markets. We believe balancing our geographic reach will make us less exposed to different economic cycles and
provide us with additional growth opportunities. We plan to focus on Brazil and China as entry points with different
approaches. We have recently entered the Brazilian market through the acquisition of the Frefer group in May 2011
and may consider further acquisitions of independent distributors. We will enter the Chinese market by establishing
a medium-sized service center to service local subsidiaries of international companies and have recently rented the
related facilities. We intend to differentiate ourselves from local competitors in China with just-in-time-delivery,
added services, reliability and payment terms.
Organic growth: The basic economic conditions in our core markets of Europe and North America have
changed considerably. While previously we were selling into a growing market, we now face tough competition for
a smaller market size. Consequently, we intend to significantly increase our focus on the customer to offer
customized products and services to expand our market share. At the same time, we want to increase customer
loyalty as well as customer benefits and intend to approach our customers more proactively, better marketing the
advantages of our international network. In addition, we are going to further expand our product portfolio to include
higher-margin products (focusing on sheets, plates, hollow sections, tubes and aluminum) and increase processing
services offered. We believe this will make our business model less exposed to fluctuating steel prices and that
integration along the value added chain should have a positive effect on our margin.
Business optimization: For a global distributor such as Klöckner & Co, we believe that optimized, harmonized
processes are a decisive success factor and a way of differentiating ourselves from the competition. As a
result, we continue to place high priority on our efforts to optimize procurement, our logistics network and IT. We
have established a new department “Operations Europe” to coordinate and monitor our various operations. By
further improving our reliability and quality together with enhancing efficiency, we will seek to continue to compete
by offering best in-class solutions and continuously expanding our competitive edge.
Personnel and management development: As a service company, one of the main prerequisites for implementing
our ambitious growth plans will be to develop our employees and managers. Well trained and motivated
employees are key to our success. Therefore, we are currently developing better programs to expand significantly
the training and education of our employees and senior officers, thereby making us more attractive as an employer.
The Acquisition of Macsteel
On April 29, 2011, Klöckner & Co SE signed a purchase agreement to acquire Macsteel Service Centers USA,
Inc. (“Macsteel”) from the seller Macsteel Global B.V. The maximum cash purchase price that will be paid is USD
660 million. In addition, debt (including pension liabilities) amounting to USD 258 million has been assumed. If
Macsteel posts EBITDA of less than USD 120 million in fiscal year 2011, the purchase price will be reduced by up
to USD 60 million. Macsteel will be consolidated effective May 1, 2011. With its 30 locations, Macsteel is one of
the leading steel service center companies in the United States. In 2010, Macsteel generated sales of USD
1,325 million (2009: USD 1,188 million) and generated a net income of USD 16.3 million (2009: net loss USD
47.6 million); total assets amounted to USD 662.8 million as at December 31, 2010. The transaction closed on
April 29, 2011 and we will consolidate Macsteel for the first time as of May 1, 2011. With the acquisition of
Macsteel we are expanding our product and service portfolio towards a higher value added and more stable service
center business with mainly industrial and manufacturing customers and strengthening our market position
significantly by doubling our sales in the United States.
Overview
Macsteel Service Centers USA is headquartered in Newport Beach, California, and we believe it is one of the
leading metals processors and distributors in North America. With 30 locations located throughout North America
with an emphasis on the East Coast, Midwest, Southwest and West Coast regions of the United States as well as
Mexico and Puerto Rico, Macsteel processes and distributes carbon, stainless, aluminum and specialty metals.
Macsteel’s presence in North America traces back to 1983. In 1995, Macsteel acquired Usinor’s Edgcomb Metals
service center group and joined the two companies, Edgcomb and Ferro, under the umbrella name Macsteel Service
Centers USA. Acquisitions continued in 2001 and 2002, with the purchase of the assets of Bellesteel and the
acquisition of Baldwin Steel from Duferco. The acquisition of structural steel specialist Regal Steel Supply from
Corus was completed in 2003. On January 1, 2004, all of the operating entities began operating under the name
Macsteel Service Centers USA. In February, 2004 Hokin-Katz, a well-established flat-roll processor located in Los
Angeles, was purchased and brought under the Macsteel umbrella. In the latter part of 2005, Macsteel Service
Centers USA acquired Alpha Steel and Alpha Processing Inc., heavy gauge steel processors based in Chicago. The
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company has recently established greenfield sites in Mexico, Puerto Rico, Oregon and Arizona. Macsteel’s
customer segment includes transportation, machinery, oil & gas, agriculture, appliances, and construction equipment.
Macsteel’s product offerings include a full range of carbon, stainless, aluminum flat-rolled products, tubing,
piping, cold finished bars, hot rolled bars, structurals, metal building products and an array of stainless and
aluminum bars and plate products. Macsteel provides services such as slitting, leveling, multi-cut precision
blanking and plate processing.
Strategic Background
With the acquisition of Macsteel we will significantly improve our US market position and believe that we will
become the third largest multi metal distributor and steel service center (after Reliance Steel and Ryerson). The
acquisition is an execution of our strategy to expand our SSC business with industrial customers in North America.
Our customer mix will be further strengthened outside the construction industry. It also rebalances our geographic
sales mix, with North America accounting for around 30% of group sales in the future (compared to approximately
17.1% today). Macsteel significantly expands our geographic foot print. Due to its strong focus on flat products,
Macsteel will also improve our product sales mix in North America. We also expect synergies in purchasing and
administration. We believe that the acquisition will in particular benefit our strategy to expand the flat steel product
steel service center business with industrial customers.
The Acquisition of Frefer
On May 5, 2011 Klöckner & Co SE signed a purchase agreement relating to the acquisition of 70% of the shares in
the Frefer group (a part of which will be acquired via a capital increase of Frefer). Put and call options have been agreed
for the potential later transfer of the remaining shares at terms and conditions that have already been determined. The
transaction closed on May 23, 2011 and we expect to consolidate Frefer for the first time as of June 1, 2011.
Overview
Frefer was founded in 1964, is headquartered in Sao Paulo and is one of the largest producer-independent steel
distributors in Brazil. In 2010, Frefer generated total consolidated sales of R$327.7 million (EUR 140.6 million) and
net income of R$12.9 million (EUR 5.5 million) (in each case according to the combined financial statements
relating to the acquired business and based on an average 2010 exchange rate of 1 R$ = EUR 0,428921306); total
assets amounted to R$192.4 million as at December 31, 2010 (EUR 86.8 million, based on an exchange rate of
1 R$ = EUR 0,450917617 as of December 31, 2010). Frefer distributes locally produced and imported steel
products through its own distribution network. Frefer’s product focus lies on flat steel, i.e. plates, sheets and coils.
Furthermore, it offers cutting services (e.g. plasma cutting) and other services in cooperation with third party steel
service centers and, to a lesser extent, also produces metallic structures for the construction industry. Frefer has 14
locations (mainly situated in the southeast of Brazil). The main industries served by Frefer are machinery and
industrial equipment, steel distribution, construction industry as well as automotive.
In connection with the acquisition, we have entered into a shareholder agreement with the seller, Christiano
Freire, that provides for various minority rights, namely: (1) The Board of Officers, composed of three members and
responsible for the day-to-day business of Frefer, shall be headed by Christiano Freire who will have the deciding
vote in management decisions. (2) In the shareholders’ meeting, certain resolutions will require a supermajority
vote of 80% of the capital as long as Christiano Freire owns at least 25% of Frefer’s capital; such resolutions
include, among others, acquisitions, capital increases, certain corporate restructurings, liquidations as well as
budget approvals and investment plans. In case of a deadlock, however, we are entitled to acquire the remaining
shares at fair market value. Accordingly, our control of Frefer is limited to a certain extent for a period of time.
Strategic Background
With our acquisition of Frefer, we aim to establish a presence in emerging markets where we believe steel
consumption will develop more dynamically as in established markets. With a total steel consumption of
26.6 million tons in 2010 (Source: IABr), the Brazilian market is already one of the largest steel consuming
market worldwide. The country produced approximately 32.8 million tons of steel in 2010, primarily for the local
market (source: IABr). Frefer is one of the largest independent steel distributors in Brazil. According to the
Brazilian association of steel distributors (INDA), Frefer was the third-largest mill-independent distributor in 2010.
Products and Services
We offer our products and services through our distribution locations. These distribution locations stock large
inventories of steel and metals in various dimensions and grades, and thus assume the storage risk for customers and
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suppliers. Service centers also offer value-added services such as blanking, stamping, plasma and flame cutting,
galvanizing, heat treatment, priming, slitting, bending and shot-blasting. In Switzerland and the United Kingdom
additional value-added services are offered at steel service centers for flat products.
The table below shows the percentage of our total sales that was generated by each product group in the
financial year 2010:
Product group
Percentage of
total sales
Flatproducts ........................................................ 35%
Long products/sectional steel. ........................................... 26%
Tubes ............................................................. 9%
Quality steel/stainless steel ............................................. 8%
Total steel ......................................................... 78%
Aluminum ......................................................... 7%
Other ............................................................. 15%
Products
The main products we offer are made of carbon steel, stainless steel, aluminum and other non-ferrous metals.
We maintain inventories of these products in various forms, grades and dimensions as well as with various surface
finishes.
Long products/sectional steel (26% of 2010 sales)
SECTIONAL STEEL (LONG STEEL PRODUCTS)
Sectional steel is made from a bar or ingot. The material is produced in diverse grades and dimensions and is
used in a multitude of areas. Sectional steel is especially used in the construction, mechanical engineering, and other
manufacturing industries. Wire products are also categorized as sectional steel, although these are generally stored
rolled up as coils.
STEEL BARS AND REINFORCING STEEL
Steel bars and reinforcing steel are produced by rolling steel billets, which are semi-finished products that are
subsequently brought into their final form by rolling or pressing them in the course of steel production. The main
forms of steel bars are round steel rods, flats, angles and structural steel. These products are used by various
customer groups for the production of a variety of finished products including furniture, handrails, bridge
constructions and machines. Reinforcing steel, which is also known as concrete steel, is used to reinforce the
concrete used on and in roads, bridges and buildings.
WIRE ROD
Wire rod is a steel product, which is rolled into a wire with a thickness ranging from 5.5 to 42 millimeters. This
product is normally coiled. Depending on the application area and the associated mechanical requirements, the
product is manufactured in various grades. It is commonly used in the automotive, construction and mechanical
engineering industries.
WIRE PRODUCTS
This category includes a broad range of products made of cold drawn wire rods, which are passed through a
number of production steps to improve their surface finish, dimensional tolerance and mechanical characteristics,
such as tensile strength. Wire products are used in the production of steel springs, power lines and various cable
products and wire welding electrodes.
Flat products (35% of 2010 sales)
FLAT STEEL
Flat steel products is the term used for steel products that are formed into a strip by means of various rolling
procedures while in a hot or cold state. Strips are distinct from sheet products. A flat product that has a width of over
600 millimeters is usually classified as a sheet. Sheet products are used in industries such as construction,
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shipbuilding, and in the production of large diameter pipes and boiler systems. Steel strips, on the other hand, are
commonly used in the automotive industry, in the production of white goods and in the packaging industry.
HOT-ROLLED WIDE STRIP
Hot-rolled wide strip is produced from a steel slab which is heated and passed through a multistep rolling mill
until it is reduced to a thickness of less than 12 millimeters. Generally, the resulting strip is rolled up in coils.
Hot-rolled wide strip is a rolled product that is used when the surface finish is unimportant, for example in
manufacturing certain parts of vehicle interiors, the production of farm machinery and in the construction industry.
COLD-ROLLED THIN SHEETS
Cold-rolled thin sheets, also referred to as thin sheets, are produced from hot-rolled wide strips. Before coldrolling,
the hot-rolled strips are pickled to remove the scale caused by rolling. In the cold-rolling process, the strip is
continually rolled until the desired thickness and/or mechanical properties are achieved. It is possible to produce a
variety of surface textures in accordance with the desired surface finish and the product’s future application. Coldrolled
thin sheets are used mainly in the automotive and instrument production industries.
SHEET WITH SPECIAL SURFACE FINISHES
Coated steel is generally made of thin sheets, which are protected from corrosion by the application of zinc, tin,
chromium, aluminum or coatings of paint or plastic. The most common and best-known methods used to protect
thin sheet surfaces are hot-dip galvanizing and zinc plating. Surface coated sheets are at the top end of the pricing
scale for steel products, as a result of high production costs due to the elaborate production processes and the
demands placed on the mechanical properties of the sheets. Steel with special surface finishes is used in many areas
ranging from ventilation and heating systems to air ducts and fuse boxes, and in packaging systems such as food
containers.
Tubes (9% of 2010 sales)
In this category, a distinction is usually made between seamless tubes, which are produced from a steel ingot,
and welded tubes.
SEAMLESS TUBES
Seamless tubes are produced from a solid steel ingot. The production process used for seamless tubes depends
on the desired diameter, wall thickness and the length of the final tube.
WELDED TUBES
Welded tubes include those that are made by high-frequency welding, longitudinal welding and spiral tube
welding. The input stock for this type of tube is either a hot-rolled wide strip or steel plate. Since the welded seam is
so important, an induction annealing system is used to ensure that the base material’s required mechanical
properties are achieved.
Quality steel/stainless steel (8% of 2010 sales)
QUALITY STEEL
Quality steel, which includes special construction steel and bright steel, must satisfy the highest demands with
regard to corrosion resistance, durability, material fatigue and other mechanical properties. A distinction is made
between unalloyed and alloyed steels, where the composition of the alloy is determined by the intended application
of the material. Quality steel is used in the automotive and the farm machinery industries and, in particular, in the
mechanical engineering industry. Products for which quality steel is used include, among others, axles, crankshafts,
drive shafts, bearings and seamless tubes.
STAINLESS STEEL
Steel is considered to be stainless steel if its chemical composition shows a chromium component of more than
10%, regardless of whether it also contains other alloys. Stainless steel is highly resistant to corrosion and heat and
can be easily maintained. For this reason, stainless steel is very often used in the automotive and food processing
industries as well as for medical equipment, household appliances and for the cladding (visible parts) of buildings.
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There are a variety of types of stainless steel, allowing the customer to use this material in a wide range of
applications.
Aluminum (7% of 2010 sales)
Aluminum can be recycled and is both light and resistant to corrosion. These advantages have resulted in an
increasing usage of aluminum in the automotive industry. Aluminum is also used in the aerospace industry, in
facade construction and in the packaging industry.
Other (15% of 2010 sales)
To a small extent we also offer other products such as professional hand tools, industrial hardware, and roofing
and wall products in certain markets.
Services
As a supplemental service to the distribution of steel and metal products, we offer various customized valueadded
services such as cutting, including flame-cutting (autogenous and plasma-cutting) on computer and optically
controlled equipment with flame-cutting programs from computer-aided design, or CAD, systems. In addition, we
offer ultrasonic testing, cutting into sections and cutting-to-length, slitting and sawing (miter cuts), cutting and
splitting, welding, painting, foiling, drilling, other machining work such as edging, bending, boring, thread cutting,
planing, grinding, pointing and centering, as well as preservation which includes shot blasting, sandblasting, descaling,
priming, galvanizing, anodizing, color coating and foil coating and polishing.
Local Presence
As of December 31, 2010, we had a total of 246 distribution locations throughout Europe and North America.
The following table shows the distribution of our distribution locations:
Country or region
Number of
distribution locations
Germany/Austria . . .............................................. 22
France/Belgium . . . .............................................. 75
Switzerland .................................................... 29
United Kingdom . . .............................................. 27
Spain ........................................................ 42
The Netherlands . . .............................................. 5
Eastern Europe . . . .............................................. 14
United States. .................................................. 32
Differences in the density of our network in different regions are the result of local market requirements and
differences in infrastructure and topography. For example, customers in the United States generally accept larger
distances to the closest distribution location than in most European markets. Our networks in France and
Switzerland, on the other hand, are much denser than in most other regions where we are active in Europe, as
the structure of the French road network makes it difficult and time-consuming to transport goods from East to West
and mountainous terrain in Switzerland can require extensive detours to cover relatively small distances.
In 2010, the distribution of our sales was as follows:
Country or region
Percentage of
total sales
Germany/Austria. .................................................... 29.0%
France/Belgium ..................................................... 19.3%
Switzerland. ........................................................ 15.5%
United Kingdom ..................................................... 7.6%
Spain ............................................................. 5.6%
The Netherlands ..................................................... 4.5%
Eastern Europe ...................................................... 1.4%
United States ....................................................... 17.1%
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The range of products and services we offer is customized to the requirements and demands of the individual
regional markets. The section below is organized by country and discusses the particular aspects of the local
markets in which we operate.
Europe
Our European segment is characterized by diverse business models that are adapted to local requirements and
developed in the historically independent country operations. We provide central guidelines and direction and have
centralized certain functions such as financing, procurement, product management and IT. Local management
retains a high degree of discretion in sales and day-to-day operations in their respective markets. Several country
operations, such as Austria, Belgium and our sales office in Ireland, are part of the organization of neighboring
countries. The presentation below follows this management structure.
Germany/Austria
In Germany, we offer our customers an extensive range of products and services from 20 distribution locations
and 6 sales offices.
In recent years, we streamlined our distribution network in Germany by reducing the number of distribution
locations, creating specialty distribution locations and focusing our activities on the economically stronger regions
of Western and Southern Germany. In 2010, we closed the acquisition of Becker Stahl. In Germany, Becker Stahl
operates one of the largest and most modern single site steel service centers in the world. With the acquisition of
Becker Stahl, we reinforced our market position in Germany and Western Europe, added to our range of products
and services, and improved the sector mix of customer groups we supply.
In addition to our distribution business, we offer just-in-time deliveries of processed metals, which are
dispatched from processing centers for the industrial machinery and equipment and shipbuilding industries.
We benefit from a highly diversified customer base in Germany. The majority of our customers are small and
medium-sized companies that are active in the metal fabrication, mechanical engineering, construction and
automotive repair industries. In the German market, our primary competitors include ThyssenKrupp Schulte (a
subsidiary of ThyssenKrupp AG), Carl Spaeter, Salzgitter Handel and Knauf Interfer.
In Austria, we are represented by Metall- und Service-Center GmbH Nfg. KG, which operates two distribution
locations. This company sells aluminum products such as sheets, plates, profiles, bars and roof and wall elements.
We also deliver aluminum products to neighboring Central and Eastern European countries out of Austria. The main
competitors of Metall- und Service-Center GmbH Nfg. KG are Schickmetall, Alcan, ThyssenKrupp Schulte and
Zeltner.
In 2010, our ten largest customers for Germany and Austria combined accounted in aggregate for less than 9%
of our total sales in that region. Our ten largest suppliers, in the same region, together accounted for 42% of our
purchasing volume in Germany and Austria combined.
France/Belgium
We conduct our business in France from 73 distribution locations through Klöckner Distribution Industrielle
S.A. Klöckner & Co holds a 96.8% interest in Klöckner Distribution Industrielle S.A. The remaining 3.2% is held
by the ArcelorMittal Group.
Klöckner Distribution Industrielle S.A. is one of the leading independent steel and metal distributors in France.
It offers a range of products that encompasses the full range of carbon steel, stainless steel and aluminum, as well as
the requirements of professional tradesmen. In the first quarter of 2007, we acquired the French distribution
company Tournier Holding S.A.S., which has a mill-independent steel service center near Paris and an additional
distribution location in Nantes. Tournier Holding S.A.S. is mainly active in the pre-processing and marketing of flat
steel products and, together with our purchase of the Targe group, a flat steel specialist, in February 2006, this
acquisition further strengthened our market position in the flat steel sector in France.
Klöckner Distribution Industrielle S.A.’s business is diversified amongst a large number of customers. Its ten
largest customers represented less than 4% of its total sales in 2010. The ten largest suppliers of Klöckner
Distribution Industrielle S.A. together accounted for approximately 35% of our purchasing volume in 2010, with
none of them representing more than 10% of our purchasing volume on an individual basis.
The three largest market participants — Arcelor Négoce, Klöckner Distribution Industrielle S.A. and
Descours et Cabaud — supply the majority of the steel sold in France through distributors. On an individual-
97

product basis, we believe that Klöckner Distribution Industrielle S.A. is the market leader in the sectors of precision
steel, roofing and cladding, pipes, tubes and construction steel. Klöckner Distribution Industrielle S.A. has a lower
share of the market for stainless and quality steel.
We have a presence in Belgium through Buysmetal N.V., which has two distribution locations and which is a
wholly-owned subsidiary of Klöckner Distribution Industrielle S.A. Buysmetal N.V. is specialized in flat products
and tubes. The main competitors of Buysmetal N.V. are Saey, Metal Union and Disteel. As a result of a limited
number of suppliers in Belgium, the ten largest suppliers of Buysmetal N.V. accounted for 83% of its purchasing
volume in 2010. Its ten largest customers represented approximately 20% of its total 2010 sales.
Switzerland
Our Swiss business operations (the “Debrunner Koenig Group”) are conducted through our wholly-owned
subsidiary Debrunner Koenig Holding AG. It distributes steel and other metals, as well as metal products, technical
building services and water supply products for the construction and industrial sectors and operates the leading steel
service center for flat products in Switzerland, as well as the leading distribution and service center in Switzerland
for customer-oriented solutions involving semi-finished products made of aluminum, non-ferrous metals and
stainless steel. In Switzerland, we also use our distribution network to sell hardware products, technical building
services and water supply products for the construction and industrial sectors. In addition, we operate a steel service
center for flat products. We have a total of 29 distribution locations in Switzerland.
Customers of the Debrunner Koenig Group are mainly small and medium-sized companies. Customer
concentration is low, with the group’s ten largest customers representing less than 7% of its total 2010 sales.
As a result of a limited number of suppliers in Switzerland, the Debrunner Koenig Group’s ten largest suppliers
together accounted for 33% of its purchases in 2010. The Debrunner Koenig Group’s main competitors are Brutsch-
Ruegger AG and the Carl-Spaeter Group. In addition, the Debrunner Koenig Group competes with a number of
small and medium-sized distributors.
The acquisitions of Gauss & Co AG in October 2006 and Lehner et Tonossi SA in the second half of 2007
further strengthened our existing activities in and around Zurich and in Western Switzerland. Both acquisitions
further expanded our leading market position in the steel, reinforcing steel and hardware sectors in Switzerland. In
January 2010, via our Swiss subsidiary, Debrunner Koenig Holding AG, we acquired the distributor Bläsi AG in
Berne. With this acquisition, the Swiss subsidiary of Klöckner & Co has expanded its market position in the water
supply and building technology segment, and for the first time covers the Berne region with this product portfolio.
United Kingdom
We operate our steel and metal distribution business in the United Kingdom under the name ASD Metal
Services in the United Kingdom and Ireland, consisting of 27 distribution locations and five sales offices, including
a sales office in Dublin.
We believe that we operate the largest independent steel and metal distributor as measured by sales in 2010 in
the United Kingdom. Our operating business includes the distribution of flat and other steel products, stainless steel
and aluminum products. In 2007, we acquired Westok Limited, a cellular beams and welding production, and
Interpipe UK Limited, a specialist in structural hollow sections. In January 2008, we acquired Multitubes Limited, a
company specialized in the processing and distribution of welded tubes which are used in a wide variety of
industrial sectors. The rationale of these three acquisitions was to further increase our UK product offering and
customer base, especially in processed value-added products.
Our customers consist mainly of companies in the construction industry, power plants, waste disposal
operations, air-conditioning and information and communication technology companies. Our customer base in
the United Kingdom is highly diversified, with the ten largest customers accounting for less than 9% and no
customer representing more than 2% of our 2010 sales in the United Kingdom.
The ten largest suppliers of our UK business represented approximately 87% of the purchasing volume in
2010.
In the United Kingdom, the distributor market for steel and metal products is highly fragmented. Major
competitors are, in particular, Corus, ArcelorMittal and ThyssenKrupp, all of which are mill-tied. There are also a
number of medium-sized independent businesses which, in aggregate, represent a significant market share in most
major product groups. All other distributors only have minor market shares.
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Spain
In Spain, our business operations are managed by Comercial de Laminados S.A., which has 42 distribution
locations offering a wide range of steel and metal products with a main focus on long products and flat products,
such as beams, merchant bars, coils, tubes, heavy plates, rebars and hardware products. Comercial de Laminados
S.A. also distributes quality/stainless steel and aluminum products.
As part of its distribution network, Comercial de Laminados S.A. operates service centers offering flat steel
processing services, such as sheet shearing, slitting and cutting-to-length, as well as long products processing
services, such as angle cutting, cutting-to-length, drilling, powder coating and shot-blasting.
In addition, Comercial de Laminados S.A. is the exclusive distributor in Spain of special products such as the
Kee Klamp, a structural pipe fitting for handrails, guardrails, racking and safety barriers, and Forster profile
systems, which are used on house and building facades, doors and windows.
Comercial de Laminados S.A.’s customers are primarily small and medium-sized companies, many of which
focus on the construction and metal construction sectors. Our customer base also includes companies active in other
manufacturing industries, as well as smaller traders and a large number of tradesmen’s enterprises, such as
metalworking shops. Our customer base in Spain is highly diversified, with the ten largest customers accounting for
less than 7% of our 2010 sales.
We believe that Comercial de Laminados S.A. is one of the leading metal distributors in Spain. Its main
competitors are Arcelor Distribución and Ros Casares. In 2010, Comercial de Laminados S.A.’s ten largest
suppliers accounted for approximately 82% of its purchasing volume.
The Netherlands
We have five distribution locations in The Netherlands. Our operating business is conducted through ODS
B.V., a steel and metal distribution company.
ODS B.V. supplies the Dutch market with a wide variety of metal products. The main customer segments
served by ODS B.V. are the construction industry and the plumbing and heating sector, as well as turneries, machine
tool manufacturers and craft enterprises. In addition, ODS B.V. is active in the measurement technology and control
engineering sector. ODS B.V. has a significant share of the market in all product segments, and it holds a large share
of the market for alloyed and unalloyed hot-rolled bar, tubes and tube systems (e.g., for sprinkler systems) and
aluminum. Together with Dikkema, Lommaert and Deltastaal (both known as ArcelorMittal Staalhandel), MCB,
Technische Unie, Van Leeuwen and ThyssenKrupp Metal Services, ODS B.V. is one of the leading distributors of
steel and metals in the Dutch market.
Teuling Staal B.V., a Dutch distribution company specializing in the distribution of high-alloy special steels,
focuses on duplex and super-duplex steels, high-alloy special steels which are used for conduit piping in the oil and
gas, chemical and petrochemical industries on account of their corrosion resistance.
ODS B.V. mainly supplies small and medium-sized companies and has a low degree of customer concentration.
Its ten largest customers together represented less than 9% of its total 2010 sales. Its largest single customer
generated less than 2% of its sales during this period. ODS B.V. also has a relatively broad range of suppliers. The
ten largest suppliers provided approximately 38% of its total purchasing volume in 2008.
Eastern Europe
In Bulgaria, we increased our stake in the distribution company Metalsnab Holding AD from 7.3% to a
majority shareholding of 77.3% in January 2008, and further raised our holding to 99.75% in the second half of 2008
(99.77% as of December 31, 2010). The company’s key product groups include long products, flat steel and tubes,
and it has eight distribution locations across Bulgaria covering the country’s key industrial locations. The
company’s main customers are drawn from the construction industry and the mechanical and plant engineering
sector.
Business operations are currently being developed in the Czech Republic (two distribution locations), Poland
(two distribution locations), Romania (one distribution location) and the Baltic States (one sales office in
Lithuania). We also operate a small service center in Hungary mainly for internal supply. In some of these
countries, we have elected to start a new “greenfield” operation due to the lack of attractive acquisition targets. In
Poland and the Czech Republic, we were able to build on existing relations with customers who were previously
supplied from German sites.
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North America
United States
In the United States, we believe that we are among the leading distributors of heavy carbon steel, our main
focus in this market, and the tenth-largest warehousing multi-metal distributor overall — following the completion
of the acquisition of Macsteel we believe that we will be the third-largest warehousing multi-metal distributor. Since
2006, we have significantly expanded our presence in the United States through our acquisitions of Green Rhino
Steel, LLC (business name: Action Steel) in October 2006, Primary Steel LLC in May 2007, Premier Steel, Inc. in
May 2007, the businesses of Scansteel Service Center, Inc. in November 2007, and Taylor Equipment and Machine
Tool Corporation (business name: Temtco Steel) in May 2008, which supplemented our product portfolio and
significantly expanded the geographic reach of our subsidiary Namasco Corporation. In August 2010, the
operations of Angeles Welding & Mfg., Inc. (Angeles Welding) and its subsidiary Get Steel, Inc. were acquired
by our U.S. country organization Namasco Corp. by form of an asset deal. While Primary Steel LLC specializes in
the distribution and pre-processing of flat steel products, and particularly plates for mechanical and plant
engineering applications, Temtco Steel focuses on the distribution of specialty plate, with a large share of
processing and a high quality product portfolio including high strength quenched and tempered steel, wear
resistant steels and security steels. Angeles Welding operates in the sectors of metal processing, precision parts, and
steel service centers. We offer a broad range of steel and metal products together with an extensive range of valueadded
services. These value-added services include drilling, punching, splitting, flame cutting, cut-to-length,
longitudinal and cross cutting, shot-blasting and priming, as well as plasma cutting. We operate from a total base of
32 distribution locations. We have recently agreed to acquire Macsteel in the United States, which will approximately
double our market share in this important market. See “— The Acquisition of Macsteel” above.
Our main customer groups in the United States include industrial machinery and equipment and the
construction industry, as well as steel service centers. Our customer base in the United States consists of
approximately 13,000 active customers across all relevant industries. No single customer generates more than
2% of our U.S. sales.
The North American steel and metal distribution market is more fragmented than the European market, with
none of the 1,200 market participants having a market share of more than 5% in 2010. Our main competitors in the
United States are Reliance Steel, Ryerson Inc., McJunkin Red Man Corporation and Samuel, Son & Co.
Namasco Corporation sources approximately 82% of its purchasing volume from its ten largest suppliers.
Canada
We divested our Canadian subsidiary in July 2008. Namasco Limited’s primary business was the processing of
flat-rolled metal products to the North American automotive industry.
Customers
We have more than 170,000 active customers globally from various industries, such as construction,
mechanical engineering, and instrument production and manufacturing, who have purchased from us during
2010. The following survey shows the sales distribution of the Klöckner & Co Group for 2010 by industry group,
based on Company estimates:
Customer group
Percentage
of total sales
Construction industry .................................................. 39%
Industrial machinery and equipment ....................................... 23%
On-sellers . . ........................................................ 11%
Appliances/durable goods manufacturers .................................... 6.5%
Automotive . ........................................................ 10%
Other .............................................................. 10.5%
Our exposure to residential construction is low in most markets except for Spain. In particular in the
United States and the United Kingdom, steel is rarely used in residential construction.
We maintain close ties with a large number of customers. These close relationships are based on the Group’s
proximity to its customers, which is accomplished by operating approximately 246 distribution locations as of
December 31, 2010 and through our ability to quickly cater to local demands. We believe that smaller companies
primarily value service and availability, in addition to pricing. Our customers, none of which accounts for more than
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1.5% of the Group’s sales, are typically smaller and medium-sized businesses, which place orders of less than
EUR 1,200 on average. Our ten largest customers represented less than 5% of the Group’s 2010 sales.
Sales and Distribution
We believe that our decentralized structure enables us to better identify, anticipate and take advantage of
market trends, especially those specific to local markets. Our geographic coverage is based on an extensive network
of distribution locations, which is subject to constant supervision and optimization. The sales teams in each of the
distribution locations make up our primary marketing channel. Each of the sales specialists of the Klöckner & Co
Group specializes in specific product categories. In most cases the remuneration for sales specialists is composed of
a fixed salary and a variable remuneration.
Inventory Management and Logistics
The administration of inventory levels and logistics play an important role in our capital needs and profitability.
Inventory levels are constantly monitored by our country management as well as our central product
management. As of December 31, 2009, inventories of approximately EUR 571 million compared to net debt of
EUR -150 million, while as of December 31, 2010, inventories of approximately EUR 899 million compared to net
debt of EUR 137 million. We maintain our inventories in a network of distribution locations that are operated as
central, regional and specialty warehouse facilities. The central distribution locations supply the local region, which
generally covers a radius of approximately 150 kilometers in Europe and approximately 250 kilometers in
North America. Central distribution locations maintain an inventory of the majority of the products for which there
is a demand in the region. Local distribution locations maintain an inventory of products with a rapid turnover rate.
As a result, these local distribution locations are in a position to deliver products in demand promptly and
individually. Customers are served by the distribution location closest to them, and products are generally ready for
delivery within 24 to 48 hours from the time the order is placed.
Our suppliers deliver their products directly to our distribution locations. The majority of our customers
request that products be delivered to the company or project site; some customers directly pick up the goods
themselves from the distribution locations. From the distribution locations, deliveries by truck are made on a daily
basis. In some countries (e.g., in the United States), these trucks belong to our subsidiaries; in others (e.g.,
Germany), we have outsourced all or part of the deliveries under exclusive agreements with selected transport
companies. Historically, when rising fuel prices or new highway tolls have led to increased logistic costs, we have
been successful in passing those on to our customers through fuel surcharges and similar measures.
Procurement
Since transporting metals between regions is time-consuming and expensive, our suppliers in Europe and
North America are primarily located in the respective world regions. For this reason, only limited quantities of
products are purchased, generally on an opportunistic basis, from Eastern Europe, Latin America and Asia. Our
sourcing strategy relies on long-standing business relationships with our major suppliers, while aiming to avoid
dependency on any single supplier. In line with industry practice, we are generally spot buyers and have, except for
our steel service center activities, no fixed-price or long-term supply agreements. Our suppliers adjust their prices
typically on a one to three-month basis, depending on the specific product. We are continuously working on
improving our purchasing processes.
During 2010, approximately 12.5% of our purchasing volume was sourced from a single supplier, while the
next four largest suppliers accounted for approximately an additional 27.8% in the aggregate. It is an important part
of our strategy not to be dependent on any one supplier. Since many metal products are available in identical or
similar specifications and qualities from a number of producers, in most cases we believe that we would be able to
obtain supply from alternative sources, if required.
Europe
In 2010, about half of our purchasing volume in Europe was sourced from our five largest suppliers. Our
suppliers are large Western European steel producers. While our largest supplier is also active in distribution and is
therefore one of our largest competitors, we are also an important customer for this supplier. The same applies to our
other suppliers. Over the last several years, we have centralized most of our purchasing in Europe. By aggregating
demand on a cross-border basis and by reducing the number of our suppliers, we have successfully been able to
negotiate improved pricing and payment terms and call off schedules for deliveries with our major suppliers. The
aggregation of purchasing volumes across borders in Europe improved our negotiating position and, as a result, we
were able to negotiate payment terms of 60 days with our key suppliers in most countries. Depending on conditions
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in the international markets, the Klöckner & Co Group also purchases steel from emerging markets. We believe that
cooperation with emerging market steel producers from countries such as Turkey, Ukraine, China, South Korea or
Latin America provides an opportunity to achieve competitive purchase prices by increasing the competition among
our supply sources.
North America
In North America, the local steel producers do not have their own distribution network. In 2010, approximately
58% of our purchasing volume in North America was sourced from our four largest suppliers in the region. Our
North American procurement is centralized at Namasco Corporation, thereby aggregating purchase volumes and
strengthening our negotiating position vis-à-vis our suppliers. The largest suppliers for the North American market
are located within North America. In order to improve our purchasing options, we have intensified our contacts with
steel producers in other regions of the world, but continue to proceed with caution in order to avoid triggering
punitive tariffs levied as part of anti-dumping measures.
Employees
The following table reflects the distribution of employees by segment, as well as the number of employees at
our administrative center (headquarters/consolidation) on December 31, 2010, December 31, 2009, and
December 31, 2008 and as of March 31, 2011, respectively:
Employees
December 31,
2008
December 31,
2009
December 31,
2010
March 31,
2011
Europe ............................ 8,696 7,708 8,187 8,240
North America ...................... 1,409 1,216 1,381 1,414
Administrative center
(headquarters/consolidation) ........... 177 108 131 135
Total ............................. 10,282 9,032 9,699 9,789
Union membership by our employees varies from country to country. We have no history of labor unrest. As a
result of our acquisitions of Macsteel and Frefer, we added approximately 1,491 to our workforce in the second
quarter of 2011; otherwise, there has been no material change in the number of our employees until the date of this
prospectus.
Organization; Material Subsidiaries
Klöckner & Co SE is a holding and financing company with no business of its own. Our operations are mainly
carried out through wholly owned subsidiaries. The diagram below depicts, in simplified form, our corporate
structure. In 2011 the intermediate holding companies Multi Metal Beteiligungs GmbH, Klöckner & Co International
GmbH and Klöckner & Co Verwaltung GmbH existing on December 31, 2010 were merged upstream on
and into Klöckner & Co SE on March 4, March 11 and May 19, 2011, respectively, with retroactive effect as of
January 1, 2011. Within the Klöckner & Co Group, profit and loss pooling agreements currently exist between
Klöckner & Co SE and its immediate subsidiaries Klöckner Global Sourcing GmbH, Kloeckner & Co USA
Beteiligungs GmbH, Becker Stahl-Service GmbH and Becker Besitz GmbH.
Klöckner & Co
Financial
Services S.A.
99,77 %
Becker Stahl-
Service GmbH
Klöckner
Metalsnab AD
Klöckner StahlundMetallhandel
GmbH
Austrian,
Baltic, Czech,
Hungarian, Polish
and Romanian
Subsidiaries
Debrunner
Koenig
Holding AG
Swiss
Subsidiaries
Klöckner & Co SE
96.8%
Klöckner
Distribution
Industrielle S.A.
French and
Belgian
Subsidiaries
Klöckner
UK France
Holding Ltd.
ASD Limited
UK
Subsidiaries
Klöckner
Netherlands
Holding B.V.
ODS B.V.
Other Dutch
and Belgian
Subsidiaries
Klöckner USA
Holding Inc.
US Subsidiaries
incl. Namasco
and Macsteel
Frefer
Klöckner
Participaciones
S.A.
Spanish
Subsidiaries
The significant subsidiaries and affiliates of Klöckner & Co SE as of December 31, 2010 are set forth below.
Significant subsidiaries and affiliates are companies having a book value equivalent to at least 10% of the equity
capital or the Group assets or which contributed the equivalent of at least 10% of the Group’s net income for the
102

year. Financial information relating to reserves and net profit/loss stated below has been taken from the respective
subsidiary’s financial statements prepared in accordance with applicable local accounting standards.
Name, registered office Interest
Area of
operation
Subscribed
capital as
of Dec. 31, 2010
(in EUR
thousands)
Book value of
the shares 1)
as of
Dec. 31, 2010
(in EUR
thousands)
Reserves
as of
Dec. 31, 2010
(in EUR
thousands)
Amounts
receivable
from the
Company as
of
Dec. 31, 2010
(in EUR
thousands)
Amounts
payable to
the Company
as of
Dec. 31, 2010
(in EUR
thousands)
Net profit/
loss 3) in
fiscal year
2010
(in EUR
thousands)
Dividends 4)
distributed
in fiscal
year 2010
(in EUR
thousands)
Multi Metal Beteiligungs
GmbH, Duisburg,
2), 5)
Germany . . . . . . . . . 100% Holding
company
25 258,272 257,908 0 167,875 57,159 57,159
Klöckner & Co International
GmbH, Duisburg,
2), 5)
Germany . . . . . . . . . 100% Holding
company
25 357,903 357,874 0 6 57,705 57,705
Klöckner & Co Verwaltung
GmbH, Duisburg,
2), 5)
Germany . . . . . . . . . 100% Holding
company
25 257,865 259,108 15,825 881,455 57,179 57,179
Klöckner Stahl- und
Metallhandel GmbH,
Germany 2) . . . . . . . . . . .
Becker Stahl-Service GmbH,
100% Distribution 10,000 32,803 73,209 0 4,777 15,224 15,224
Germany . . . . . . . . . . . .
KDI S.A.S., Aubervilliers,
100% Distribution 25,000 56,857 261,474 0 1,414 36,901 60,000
France . . . . . . . . . . . . . .
Debrunner Koenig Holding
AG, St. Gallen,
97% Distribution 62,052 102,580 61,037 0 589 24,519 0
Switzerland . . . . . . . . . .
Debrunner Acifer AG, St.
100% Distribution,
holding
company
10,812 300,000 135,766 0 0 35,919 20,290
Gallen, Switzerland . . . . .
Kloeckner & Co USA
Beteiligungs GmbH,
100% Distribution 20,793 36,379 87,638 0 0 28,921 18,257
Duisburg, Germany 2) 6) . . .
Klöckner USA Holding Inc.,
Wilmington,
100% Holding
company
25 160,025 160,000 0 6 11,713 11,713
United States . . . . . . . . .
Klöckner Namasco Holding
Corporation, Wilmington,
100% Holding
company
G 1 67,951 �6,527 0 5 16,343 0
United States . . . . . . . . .
Namasco Corporation,
Wilmington, United
100% Holding
company
1,759 202,554 219,830 0 0 26,038 26,042
States . . . . . . . . . . . . . .
Temtco Steel, LLC,
Wilmington, United
100% Distribution G 1 221,659 283,353 0 506 6,299 26,042
States . . . . . . . . . . . . . . 100% Distribution 0 144,342 144,667 0 87 2,777 0
1) Book value at the immediate parent company level.
2) Profit and loss transfer agreement in place until December 31, 2010
3) For entities with profit and loss transfer agreements the amount represents profit or loss before profit or loss transfer.
4) For entities with profit and loss transfer agreements the amount represents transferred profits or losses.
5) Entities merged upstream on and into Klöckner & Co SE with effect of January 1, 2011
6) Holder of preferred shares in Klöckner Namasco Holding Corp.
Real Estate
Our fixed assets consist primarily of real estate. Our real estate consists of distribution locations, administrative
buildings, and commercial and other real estate. The distribution locations are generally located in industrial areas
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with good expressway access and, in some cases, railway access. The size of the distribution locations is dependent
on their respective function, e.g., whether it is a central or local distribution location.
As of December 31, 2010, the book value of the real estate and property rights equivalent to real property
owned by us, as well as of buildings constructed on third-party real estate and which are part of our long-term assets,
amounted to EUR 380.5 million.
Our real property in Switzerland and Germany is encumbered by mortgage liens to secure local credit
facilities. As of December 31, 2010, these mortgage liens secured obligations of the Klöckner & Co Group in an
aggregate amount of approximately EUR 30.5 million.
Intellectual Property Rights
Companies of the Klöckner & Co Group own various graphic trademarks in the categories relevant to their
field of activity. These include, in particular, the following:
The graphic trademarks “Klöckner & Co multi metal distribution” (consisting of two lines) and “Klöckner &
Co multi metal distribution” (consisting of one line) have been registered in various countries, or are pending
registration.
The dog used as a logo by the Klöckner & Co Group has been registered with the European Office for
Harmonization, and also in Germany, Hong Kong and Canada. It has also been registered internationally and
enjoys protection in all countries of the European Union, Switzerland, the Russian Federation, South Africa
and in the United States.
In addition, numerous companies of the Klöckner & Co Group have registered domain names. These include,
among others, the following: “www.kloeckner.de”, “www.kloeckner.ch”, “www.kloeckner-stahlhandel.de”,
“www.metall-center.at”, “www.dkh.ch”, “www.koenigfeinstahl.ch”, “www.kdi.fr”, “www.buysmetal.be”,
“www.cdl.es”, “www.asdmetalservices.co.uk”, “www.odsbv.nl” and “www.namasco.com”. For historical reasons,
the name “Klöckner” is also used by companies outside the Klöckner & Co Group, for example, by Klöckner-
Werke AG.
Environmental Matters
The sites used by the Klöckner & Co Group are geared towards commercial enterprises and distribution
location maintenance. On most of the sites the usage of natural resources and the quantity of waste produced are
relatively low, and consequently the environmental impact on the surroundings is low. Nevertheless, the Klöckner &
Co Group is increasing its monitoring of its various sites in order to ensure observation of applicable environmental
regulations. Employees on-site are entrusted with the ongoing maintenance of the properties, which is provided by
the real estate, insurance and general administrative departments at the respective site.
The Klöckner & Co Group is subject to various environmental laws and regulations concerning the treatment
and disposal of hazardous substances and the clean-up of contaminated sites, as well as company health protection
and industrial safety. In its capacity as owner and operator of real estate, or when disposing of hazardous substances,
the Klöckner & Co Group may be subject to environmental clean-up liability, regardless of fault, pursuant to such
environmental provisions. The Company believes that it is in substantial compliance with currently applicable
environmental provisions.
Insurance
We believe that the Klöckner & Co Group is adequately insured against risks such as business, product and
environmental third-party liability risks. In addition, risks arising from fire, lightning, explosions, airplane
collisions and floods are insured. The Group also has fidelity insurance and directors and officers’ insurance.
However, there is currently no insurance protection against risks in connection with acts of terrorism or political
risks.
The subsidiaries are responsible for arranging coverage for other risks such as loan insurance, accident and life
insurance, transport insurance, electronic insurance and motor vehicle insurance, based in each case on the
Klöckner & Co Group’s existing insurance guidelines.
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LEGAL PROCEEDINGS
Except as described below, none of the companies of the Klöckner & Co Group is, or, during the last twelve
months, was, a party to legal or arbitration proceedings or the object of official investigations that could have or
have had a material impact on the financial condition or results of operations of the Company or of the Klöckner &
Co Group as a whole, and we are not aware of any circumstances that could be expected to give rise to such legal or
arbitration proceedings or official investigations.
Fine Imposed and Additional Investigations by the French Competition Authority
On December 16, 2008, the French competition authority (Conseil de la concurrence) imposed fines on several
steel distributors in France for taking part in anti-competitive price-fixings from 1999 through 2004. Among these
steel distributors was our subsidiary KDI S.A.S., upon which a fine of EUR 169.3 million was imposed; this fine
was later reduced to EUR 23.5 million, which we have paid. The proceedings have been closed in 2010.
In late 2008, the French competition authority also initiated investigations into alleged price-fixing and other
anti-competitive practices by two of our French subsidiaries, Reynolds European S.A.S. in Rueil Malmaison and
KDI Davum S.A.S. in La Réunion. We are cooperating with the French competition authority and have used the
opportunity to reiterate our policy of abstaining from any anti-competitive behavior. A procedural law suit relating
to the confiscation of documents at Reynolds European S.A.S. was ruled in our favor. To the extent these
investigations were to result in findings that either subsidiary violated applicable antitrust laws, such subsidiary
could be fined by the French competition authority, which fines could be significant, and face damage claims from
third parties for violations of applicable antitrust laws.
Investigations by the Spanish Competition Authority
In July 2008, the Spanish competition authority (Comisión Nacional de la Competencia (“CNC”)) carried out
inspections at the Madrid and Sevilla offices of two of our Spanish subsidiaries, Comercial de Laminados S.A. and
Hierros Guadalquivir S.A., in connection with an initiative of the Spanish business association Unión de
Almacenistas de Hierros de España (“UAHE”) recommending a breakdown of various cost elements in invoices
to customers, a possible cooperation of member companies of UAHE to unify financing costs for deferred
payments, and the collection and sharing of pricing information in the upstream market (supply of iron products).
We were indirectly affected by these proceedings, in particular if these investigations had resulted in findings that
either subsidiary violated applicable antitrust laws. However, these investigations were finally closed on
December 17, 2010, without any further consequences for our subsidiaries; UAHE was fined EUR 650,000.
Asbestos Claims
Richardsons Westgarth Ltd., an indirect British subsidiary of Klöckner & Co, is facing claims by former
employees of a legal predecessor who were exposed to asbestos in the course of their employment. During the
period between the 1940s and the 1960s, the operations of the predecessor included the equipping of ships.
Although the products that were used by the predecessor did not contain asbestos, the environment in which the
employees worked was contaminated with asbestos. Due to the insolvency of the insurer, Richardsons Westgarth
Ltd. was directly sued with respect to several claims. As of March 31, 2011, we had provisions in the amount of GBP
1.381 million relating to 15 claims, which were still pending. 7 new claims were brought in 2010 and 3 new claims
were brought in 2011. On average, these claims amount to approximately GBP 23,000 and the largest claim
amounts to GBP 88,000. As of March 31, 2011, approximately GBP 2.854 million had been paid in compensation.
MTU Friedrichshafen GmbH/Allianz SE vs. Röhrenlager Mannheim GmbH
MTU Friedrichshafen GmbH and Allianz AG have brought compensation claims against a former subsidiary
of the Group, Röhrenlager Mannheim GmbH, in an action brought before the Mannheim District Court at the end of
2002 on the grounds of the supply of tubes which plaintiffs allege to have been defective. Plaintiffs assert that due to
the alleged defects propeller shafts manufactured by MTU Friedrichshafen GmbH could not be used, and more than
60,000 vehicles of two car manufacturers had to be recalled. The claims amount to EUR 4.4 million in the
aggregate. We have agreed with the buyer of Röhrenlager Mannheim GmbH to administer the relevant legal
proceedings and to indemnify the buyer in relation to all financial impacts of the legal proceedings. Currently,
technical experts are investigating the tubes. We believe that in case Röhrenlager Mannheim GmbH is held to be
liable by the court, we may have a claim against the producer of the relevant tubes, an Italian manufacturer.
Nonetheless we have created provisions in the full amount in dispute in this case. We have not capitalized any
potential claims against the producer of the relevant tubes.
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Xella Thermopierre S.A. vs. ODS B.V.
Xella Thermopierre S.A. has brought a law suit against our subsidiary ODS B.V. and three other defendants.
ODS B.V. delivered certain materials to HEUS Maschinenbau GmbH, which in turn manufactured from such
materials, and subsequently delivered to Xella Thermopierre S.A., cutting knifes for cellular concrete. Xella
Thermopierre S.A. alleges that the final product was defective and did not meet certain technical specifications.
HEUS Maschinenbau GmbH, which had not mentioned Xella Thermopierre S.A. as end-user of the final products to
our subsidiary, also used materials delivered from another supplier (Elsinghorst) to manufacture the allegedly
defective final product. Elsinghorst and our subsidiary had both acquired the materials delivered to HEUS
Maschinenbau GmbH from the same Spanish producer (Tremifel S.A.). In our view, it is unclear what specifications
had been agreed on for the materials delivered to HEUS Maschinenbau GmbH, whether such specifications (if any)
have been met, and whether the defective materials (if any) were delivered by us or by Elsinghorst. While we do not
believe that the claim brought by Xella Thermopierre S.A. will ultimately be successful, we have created provisions
in an amount we deem appropriate.
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MATERIAL AGREEMENTS
The Klöckner & Co Group is party to the following material agreements that were entered into outside the
ordinary course of business or which are of significance to us.
Convertible Bonds
General
We have issued via financing subsidiaries in Luxembourg three convertible bonds in 2007, 2009 and 2010
maturing in 2012, 2014 and 2017, respectively. These convertible bonds have a number of common terms,
including:
Ranking
The convertible bond is the relevant issuer’s obligation and ranks at least pari passu with all other present and
future unsecured and unsubordinated obligations of the relevant issuer, and ranks senior in right of payment to all of
the relevant issuer’s existing and future subordinated indebtedness.
Guarantee
Klöckner & Co SE unconditionally and irrevocably guarantees the due and punctual payment of any and all
sums payable by the relevant issuer under the convertible bonds. The guarantee constitutes direct, unconditional,
unsecured and unsubordinated obligations of Klöckner & Co SE and ranks at least pari passu with all other present
and future unsecured and unsubordinated obligations of Klöckner & Co SE, except as otherwise provided by
mandatory law.
Negative pledges
Both the relevant issuer and Klöckner & Co SE as guarantor of the convertible bonds have, subject to certain
exceptions, granted negative pledges for the benefit of the convertible bonds, including an undertaking not to grant
any form of security interest over their assets or the assets of the guarantor’s subsidiaries for any other capital market
indebtedness (i.e., obligations for the payment of borrowed money in the form of or represented by debt securities or
similar securities which are capable of being listed, dealt in or traded on a stock exchange or another recognized
securities market) without the bondholders of the convertible bonds equally and pro ratably participating in such
security.
Change of control/merger
Upon a change of control (as defined in the terms and conditions of the convertible bonds), each holder of the
convertible bond has the right to demand from the relevant issuer redemption of all or part of the convertible bond
for which the conversion right was not exercised and which was not declared due for redemption, at the principal
amount plus interest accrued thereon. Upon the occurrence of a merger (as defined in the terms and conditions of the
convertible bond), each holder of the convertible bond may require the issuer to redeem the convertible bond at the
principal amount plus accrued interest thereon; in addition, the respective conversion price shall be adjusted
according to a certain formula.
Events of default
Standard European convertible bond market events of default apply in relation to indebtedness of the relevant
issuer of the convertible bond and Klöckner & Co SE and its material subsidiaries.
Convertible Bonds 2007/2012
In July 2007, Klöckner & Co Finance International S.A., a wholly owned subsidiary of Klöckner & Co SE,
issued a EUR 325.0 million 1.50% senior unsecured convertible bond that matures on July 27, 2012 (the
“Convertible Bond 2007/2012”). In 2009, Klöckner & Co Finance International S.A. was substituted as issuer
by Klöckner & Co Financial Services S.A., the issuer of the Convertible Bonds 2009/2014 and 2010/2017.
Interest rate
The Convertible Bond 2007/2012 bears interest at a rate of 1.50% per annum. Interest is payable annually in
arrears on July 27 of each year.
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Conversion right
The Convertible Bond 2007/2012 is convertible into ordinary registered shares of Klöckner & Co SE at the
option of the holder from September 6, 2007 until July 18, 2012, subject to certain excluded periods. The initial
conversion price is EUR 80.75. The initial conversion ratio is 619.1950 shares per EUR 50,000 nominal amount.
Standard German market anti-dilution provisions apply to the initial conversion price and conversion ratio. In
connection with the rights issue in 2009 the conversion ratio was adjusted to 709.803 shares per EUR 50,000
nominal amount and the conversion price to EUR 70.44.
Issuer call
From and after August 15, 2010, upon giving not less than 20 and not more than 40 days’ notice, Klöckner &
Co Financial Services S.A. (successor of Klöckner & Co Finance International S.A.) may at any time redeem the
Convertible Bond 2007/2012 in whole, but not in part, at the principal amount plus accrued interest thereon until
(but excluding) the date of redemption if the XETRA-quotation (as defined in the terms and conditions of the
Convertible Bond 2007/2012) on at least 20 of the 30 trading days immediately preceding the publication of the
redemption notice exceeds 130% of the then-applicable conversion price.
Convertible Bond 2009/2014
In June 2009, Klöckner & Co Financial Services S.A., a wholly owned subsidiary of Klöckner & Co SE, issued
a EUR 97.9 million 6.0% senior unsecured convertible bond that matures on June 9, 2014 (the “Convertible Bond
2009/2014”).
Interest rate
The Convertible Bond 2009/2014 bears interest at a rate of 6.0% per annum. Interest is payable annually in
arrears on June 9 of each year.
Conversion right
The Convertible Bond 2009/2014 is convertible into ordinary registered shares of Klöckner & Co SE at the
option of the holder from July 20, 2009 until June 1, 2014, subject to certain excluded periods. The initial
conversion price is EUR 21.06. The initial conversion ratio is 2,374.1690 shares per EUR 50,000 nominal amount.
Standard German market anti-dilution provisions apply to the initial conversion price and conversion ratio. In
connection with the rights issue in 2009 the conversion ratio was adjusted to 2,721.586 shares per EUR 50,000
nominal amount and the conversion price to EUR 18.37.
Issuer call
From and after June 9, 2012, upon giving not less than 20 and not more than 40 days’ notice, Klöckner & Co
Financial Services S.A. may at any time redeem the Convertible Bond 2009/2014 in whole, but not in part, at the
principal amount plus accrued interest thereon until (but excluding) the date of redemption if the XETRA-quotation
(as defined in the terms and conditions of the Convertible Bond 2009/2014) on at least 20 of the 30 trading days
immediately preceding the publication of the redemption notice exceeds 130% of the then-applicable conversion
price.
Convertible Bonds 2010/2017
In December 2010, Klöckner & Co Financial Services S.A., a wholly owned subsidiary of Klöckner & Co SE,
issued a EUR 186.2 million 2.5% senior unsecured convertible bond that matures on December 22, 2017 (the
“Convertible Bond 2010/2017”).
Interest rate
The Convertible Bond 2010/2017 bears interest at a rate of 2.5% per annum. Interest is payable annually in
arrears on December 22 of each year.
Conversion right
The Convertible Bond 2010/2017 is convertible into ordinary registered shares of Klöckner & Co SE at the
option of the holder from February 1, 2011 until December 12, 2017, subject to certain excluded periods. The initial
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conversion price is EUR 28.00. The initial conversion ratio is 1,785.714 shares per EUR 50,000 nominal amount.
Standard German market anti-dilution provisions apply to the initial conversion price and conversion ratio.
Issuer call
From and after December 22, 2015, upon giving not less than 20 and not more than 40 days’ notice,
Klöckner & Co Financial Services S.A. may at any time redeem the Convertible Bond 2010/2017 in whole, but not
in part, at the principal amount plus accrued interest thereon until (but excluding) the date of redemption if the
XETRA-quotation (as defined in the terms and conditions of the Convertible Bond 2010/2017) on at least 20 of the
30 trading days immediately preceding the publication of the redemption notice exceeds 130% of the thenapplicable
conversion price.
Investor put option
After December 22, 2015 upon giving not less than 20 days’ prior notice, any bondholder may declare all or
some of the bonds not previously converted or redeemed due. The issuer will redeem such bonds at the principal
amount plus interest accrued on the principal amount.
Senior Revolving Credit Facility
Certain of our existing debt is funded by loans made available to us under a Senior Revolving Credit Facility
Agreement dated May 28, 2010 (the “Senior Revolving Credit Facility Agreement”). The Senior Revolving Credit
Facility Agreement provides for a multicurrency revolving credit facility of up to EUR 500.0 million (the “Senior
Revolving Credit Facility”).
As of March 31, 2011, EUR 225.0 million were drawn under the Senior Revolving Credit Facility. The former
borrower Klöckner & Co Verwaltung GmbH was merged upstream into its sole shareholder Klöckner & Co
International GmbH which was merged into its sole shareholder Multi Metal Beteiligungs GmbH. Multi Metal
Beteiligungs GmbH was then on merged into its sole shareholder Klöckner & Co SE, which is now the borrower
under the Senior Revolving Credit Facility.
Borrowers and purpose
Borrowers under the Senior Revolving Credit Facility Agreement are Klöckner & Co SE (after the merger with
Multi Metal Beteiligungs GmbH) and Klöckner Investment S.C.A. Klöckner & Co SE may request that certain
other of its majority-owned subsidiaries become additional borrowers under the Senior Revolving Credit Facility.
Currently, only Klöckner & Co SE utilizes the Senior Revolving Credit Facility and is also the sole borrower under
the ancillary facilities.
Any amounts drawn under the Senior Revolving Credit Facility shall be used to finance working capital
requirements of the Klöckner & Co Group.
Ancillary Facilities
Klöckner & Co SE and a lender under the Senior Revolving Credit Facility may agree that such lender provides
an ancillary facility to a borrower under the Senior Revolving Credit Facility or, upon lenders’ approval, to certain
affiliates of Klöckner & Co SE on a bilateral basis in place of all or a part of such lender’s unutilized commitments.
The aggregate volume of such ancillary facilities shall not exceed EUR 75.0 million.
As of March 31, 2011 Multi Metal Beteiligungs GmbH (now merged into Klöckner & Co SE) as the successor
of Klöckner & Co Verwaltung GmbH had established three ancillary facilities in an aggregate volume of
EUR 45.0 million which were not utilized.
Interest rates and fees
The interest rate on each advance under the Senior Revolving Credit Facility for each interest period is the
percentage rate per annum determined by the facility agent to be the aggregate of (x) the applicable margin (see
below), (y) EURIBOR (in the case of an advance denominated in euro) or LIBOR (in the case of an advance
denominated in a currency other than euro) and (z) any mandatory costs (compensating the lenders for the cost of
compliance with certain requirements of the Bank of England and the Financial Services Authority or the European
Central Bank).
The applicable margin in clause (x) above is variable and depends on the ratio of consolidated net debt to
consolidated equity (both as calculated pursuant to the Senior Revolving Credit Facility Agreement, the definition
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of consolidated equity providing for a deduction of goodwill in relation to businesses acquired after May 28, 2010).
Currently, the margin is 2.0% per annum. The margin is adjusted on a quarterly basis and may fluctuate between
2.0% and 3.5% per annum.
Klöckner & Co SE is obligated to pay a commitment fee equal to the lower of 40% of the then applicable
margin and 1.2% per annum on the daily aggregate amount of the undrawn and uncancelled portion of the Senior
Revolving Credit Facility.
Financial covenants
Virtual Net borrowing base
The aggregate amount of all loans outstanding under the Senior Revolving Credit Facility and any ancillary
facility established thereunder may not at any time exceed the then applicable virtual net borrowing base. The
virtual net borrowing base is the sum of 50% of the Klöckner & Co Group’s free receivables (defined as trade
receivables minus (i) amounts owed under the ABS-Programs, (ii) further 20% of such owed amounts to account for
ABS credit enhancement, (iii) certain trade receivables subject to cluster risks and (iv) trade receivables overdue by
more than thirty days) and 90% of the aggregate amount of the Klöckner & Co Group’s inventory less any priority
debt (as described below). Klöckner & Co SE is required to deliver periodically a certificate setting out the
calculation of the virtual net borrowing base as at the last day of the preceding reporting period. The virtual net
borrowing base set out in a certificate applies from the delivery of such certificate until the delivery of the next
following certificate. If at the time of the delivery of the certificate the virtual net borrowing base is less than the
borrowings under the Senior Revolving Credit Facility, Klöckner & Co SE will be required to procure that loans are
prepaid in an amount ensuring that such shortfall is cured.
Gearing Ratio
Klöckner & Co SE is required to ensure that at the end of any four consecutive fiscal quarters the gearing ratio
(i.e. the ratio of consolidated net debt to consolidated equity as calculated pursuant to the Senior Revolving Credit
Facility Agreement, such calculation providing for a deduction of minority interests and goodwill in relation to
businesses acquired after May 28, 2010) does not exceed 1.50. If this covenant is not complied with, Klöckner & Co
SE will be required to procure that all amounts outstanding under the Senior Revolving Credit Facility and any
ancillary facility established thereunder shall be prepaid and the Senior Revolving Credit Facility and any ancillary
facility established thereunder may not be utilized until compliance is demonstrated in relation to any following
testing period. However, such non-compliance does not constitute an event of default under the Senior Revolving
Credit Facility.
Minimum consolidated equity
Klöckner & Co SE is required to ensure that, at the end of each testing period, consolidated equity (as
calculated pursuant to the Senior Revolving Credit Facility Agreement, such calculation providing for a deduction
of minority interests and of goodwill in relation to businesses acquired after May 28, 2010) does not fall short of
EUR 500.0 million. If this covenant is not complied with, Klöckner & Co SE will be required to procure that all
amounts outstanding under the Senior Revolving Credit Facility and any ancillary facility established thereunder
shall be prepaid and the Senior Revolving Credit Facility and any ancillary facility established thereunder may not
be utilized until compliance is demonstrated in relation to any following testing period. However, such noncompliance
does not constitute an event of default under the Senior Revolving Credit Facility.
Most favored lenders concept
If any member of the Klöckner & Co Group enters into an agreement resulting in any part of consolidated debt
(as calculated pursuant to the Senior Revolving Credit Facility Agreement) other than priority debt (as described
below) benefiting from a financial covenant other than the covenants described above or which would be more
beneficial to the lenders under the Senior Revolving Credit Facility than the requirements described under
“—Gearing Ratio” or “—Minimum consolidated equity” above, then such other or more beneficial covenant shall
also apply to the Senior Revolving Credit Facility until such other agreement is terminated and repaid.
Undertakings
The Senior Revolving Credit Facility Agreement contains negative and affirmative covenants and requirements
affecting Klöckner & Co SE and its subsidiaries. The Senior Revolving Credit Facility Agreement contains,
among others and subject in each case to certain customary exceptions and materiality thresholds, the following
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negative covenants and restrictions: restrictions on mergers, disposals, the entry into hedging transactions, the
granting of loans or giving of guarantees and the incurrence of priority debt, which must not — when aggregated
with the amounts drawn under the ABS Programs — exceed an amount corresponding to 30% of the consolidated
total assets of the Klöckner & Co Group. Priority debt within the meaning of the Senior Revolving Credit Facility
Agreement comprises (i) that portion of consolidated debt incurred by Klöckner & Co SE, Klöckner & Co
Verwaltung GmbH or a finance company (as defined in the Senior Revolving Credit Facility Agreement) in respect
of which certain encumbrances have been created and (ii) that portion of consolidated debt incurred (other than
under the Senior Revolving Credit Facility or the ABS Programs) by any member of the Klöckner & Co Group other
than Klöckner & Co SE, Klöckner & Co Verwaltung GmbH or a finance company (as defined in the Senior
Revolving Credit Facility Agreement). Furthermore, the members of the Klöckner & Co Group are restricted from
incurring debt to be accounted for as consolidated debt under the ABS Programs in excess of an amount that —
when aggregated with the amount of priority debt — exceeds an amount corresponding to 30% of the consolidated
total assets of the Klöckner & Co Group.
The Senior Revolving Credit Facility Agreement also contains, among others, the following affirmative
covenants: mandatory periodic reporting of financial and other information to the facility agent, notice to the
facility agent upon the occurrence of certain events of default and other events, and other standard obligations that
will require the members of the Klöckner & Co Group to operate their business in an orderly manner and consistent
with past practice and to maintain insurance coverage. In addition, the Senior Revolving Credit Facility Agreement
provides for a representation (to be repeated in connection with each utilization) confirming availability of the ABS
Programs (and/or any equivalent replacement thereof) to the Klöckner & Co Group taken as a whole in aggregate
program amounts and/or commitments to provide finance in an amount at least equivalent to the lower of
EUR 300.0 million and the total commitments under the Senior Revolving Credit Facility. Furthermore, if the ABS
Programs (and/or any equivalent replacement thereof) are no longer so available, Klöckner & Co SE will be
required to procure that all amounts outstanding under the Senior Revolving Credit Facility and any ancillary
facility established thereunder shall be prepaid. The mere failure of the ABS Programs (and/or any equivalent
replacement thereof) to be so available or occurrence of any event of default thereunder would, however, not
constitute an event of default under the Senior Revolving Credit Facility.
Maturity
All amounts outstanding under the Senior Revolving Credit Facility and any ancillary facility established
thereunder must be repaid in full no later than at the maturity date of the Senior Revolving Credit Facility. The
maturity was extended by one year until May 28, 2014 by 100% of the syndicate banks (Extension Option). The
Extension Option was exercised prior to the first anniversary of the signing date of the Senior Revolving Credit
Facility Agreement.
Change of control
Each lender under the Senior Revolving Credit Facility Agreement may require prepayment of any loans
extended by it and cancellation of its commitment upon any person or group of persons acting in concert acquiring
(directly or indirectly) more than 50 percent of the voting rights in Klöckner & Co SE.
Events of default
The Senior Revolving Credit Facility Agreement sets out certain customary events of default, the occurrence
of which would allow the lenders to accelerate all outstanding loans and terminate their commitments.
Promissory Notes (Schuldscheindarlehen)
In the second quarter of 2010 Klöckner & Co Verwaltung GmbH raised EUR 145.0 million through the issue of
five promissory notes (the “2010 Promissory Notes”) guaranteed by Klöckner & Co SE. The Promissory Notes
mature between 2013 and 2015. In the second quarter of 2011 Klöckner & Co Verwaltung GmbH was merged into
Klöckner & Co SE which is now the issuer of the Promissory Notes.
In the second quarter of 2011 Multi Metal Beteiligungs GmbH and Klöckner & Co SE as its legal successor
issued promissory notes in the aggregate amount of EUR 148.0 million (the “2011 Promissory Note”). These
promissory notes are arranged based on the same documentation that was used in 2010.
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Interest rates
Promissory Notes in an aggregate volume of EUR 73.0 million carry interest at a fixed rate while the remaining
Promissory Notes in an aggregate amount of EUR 220.0 million provide for a floating interest rate calculated on the
basis of the applicable EURIBOR plus a margin.
Financial Covenants
The Promissory Notes provide for customary balance-sheet based financial covenants. Klöckner & Co SE
must ensure that at the end of any four consecutive financial quarters the Gearing Ratio (i.e. the ratio of consolidated
net debt to consolidated equity as defined in the Promissory Notes) does not exceed 1.50. The Promissory Notes
further provide that, at the end of each such testing period, consolidated equity (as defined in the Promissory Notes,
such definition providing for a deduction of goodwill in relation to businesses acquired after the date of the
Promissory Notes) must not fall short of EUR 500.0 million.
Undertakings
The Promissory Notes contain customary affirmative and negative undertakings, including a negative pledge
covenant and a disposal covenant (in each case subject to agreed exceptions).
Maturity
Whereas one of the 2010 Promissory Notes in the nominal amount of EUR 50.0 million provides for scheduled
repayment with a final installment falling due in 2015, the other Promissory Notes provide for repayment in one
amount at maturity dates in 2013 and 2015, respectively. Out of these four Promissory Notes, Promissory Notes
with a nominal value of EUR 62.0 million have a final maturity date in 2013 and Promissory Notes with a nominal
value of EUR 33.0 million have a final maturity date in 2015. With regard to the maturity profile, the promissory
notes issued in 2011 can be split into two types of transactions. Whereas promissory notes in the amount of
EUR 123.0 million are falling due in April 2016, the remaining promissory notes of EUR 25.0 will be repaid in two
separate installments of 50% in April 2015 and 50% in April 2016.
Events of Default
The Promissory Notes contain customary events of default, the occurrence of which would allow each lender
to accelerate all outstanding loans.
Bilateral Credit Facilities of International Subsidiaries
Other than in respect of the Senior Revolving Credit Facility, further liabilities due to banks are comprised
exclusively of bilateral borrowings of subsidiaries, which at present are primarily used to finance working capital.
As of March 31, 2011, companies of the Klöckner & Co Group located in Switzerland, the United States, Eastern
Europe, Austria, Germany, Spain, the United Kingdom and France had bilateral lines of credit (including finance
leases) in an aggregate amount of EUR 456.5 million, of which a total of EUR 73.8 million had been drawn down.
The Debrunner Koenig Group has, as of March 31, 2011, bilateral facilities with an aggregate volume of
EUR 262.7 million in place. In total, EUR 22.1 million were drawn under such facilities as of March 31, 2011.
Certain of these facilities, with aggregate drawings of EUR 11.9 million as of March 31, 2011, are secured by
mortgages on property owned by the Swiss operating companies. Amounts made available under the facilities, but
not drawn for a fixed term, may be cancelled by the respective bank at any time. The underlying credit agreements
contain certain local financial covenants.
In the United States, we have a USD 250.0 million revolving credit facility that was renewed on May 12, 2011
in connection with the acquisition of Macsteel Service Centers USA. With the renewal of this facility it was
extended to a five year commitment. At the same time the volume was increased by USD 150.0 million and
Macsteel acceded to the agreement as new borrower. The total commitment for the facility is shared between two
lenders with Wells Fargo as the Agent and Bank of America as new lender each providing an amount of USD
125.0 million. This facility matures on the earlier of (i) the termination of the U.S. ABS Program, (ii) May 12, 2016,
and (iii) the date that the commitments are permanently reduced to zero by the borrowers. The underlying credit
agreement (the “U.S. Credit Agreement”) contains a financial covenant requiring a fixed charge coverage ratio of
1.1 to 1.0 in case the availability under the borrowing base falls below the agreed level. This ratio is calculated in
principle on the basis of adjusted EBITDA divided by cash-pay interest and scheduled debt repayments. As of
March 31, 2011, USD 5.5 million were drawn under this facility.
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The other bilateral facilities of subsidiaries located in Eastern Europe, Austria, Germany, Spain, the
United Kingdom and France, have an aggregate volume of EUR 123.3 million (including finance lease) of which
as of March 31, 2011, EUR 47.6 million were drawn.
ABS Programs
General
We have established two separate ABS programs, one in Europe and one in the United States, with current
volumes of EUR 420.0 million and USD 200.0 million, respectively. We have agreed under our Senior Revolving
Credit Facility Agreement to restrict the incurrence of debt under the ABS Programs in excess of an amount that —
when aggregated with the amount of priority debt — exceeds an amount corresponding to 30% of the consolidated
total assets of the Klöckner & Co Group. The European ABS program (the “European ABS Program”) currently
includes subsidiaries of Klöckner & Co SE in Germany, France, the United Kingdom and The Netherlands and is
open also, but currently not operative, for subsidiaries in Spain (subject to the fulfillment of certain conditions
precedent). The European ABS Program is scheduled to terminate on March 7, 2013. The U.S. program in relation
to subsidiaries of Klöckner & Co SE in the United States (the “U.S. ABS Program” and together with the European
ABS Program the “ABS Programs”) is scheduled to terminate in May 2016. It was renewed in connection with the
acquisition of Macsteel Service Centers USA. Its term was extended to a five year commitment and the volume was
increased by USD 75.0 million as Bank of America, N.A., acceded to the program as a new purchaser. Wells Fargo
Bank, N.A., continued its commitment under the program as the lead arranger and administrative agent.
Utilization of the European ABS Program totaled EUR 82.6 million as of March 31, 2011, and utilization of
the U.S. ABS Program amounted to USD 106.0 million as of March 31, 2011.
Sale and purchase of receivables
Our ABS Programs require the participating subsidiaries of Klöckner & Co SE to sell their trade receivables
for securitization purposes on an ongoing basis. The participating subsidiaries sell these receivables to one of two
special-purpose vehicles, depending upon participation in the European ABS Program or the U.S. ABS Program.
The European special-purpose vehicle (the “European SPV”) was established in Dublin, Ireland, to purchase
trade receivables of the relevant subsidiaries under the European ABS Program. It maintains subsidiaries in the
home country of each participating European company. The subsidiaries of the European SPV are special-purpose
account companies that serve primarily to process client payments on the receivables assigned and sold through
bank accounts that they maintain in their own names. Because the European SPV does business exclusively with the
Klöckner & Co Group, its accounts and those of its subsidiaries are included in the consolidated financial statements
of the Klöckner & Co Group in compliance with SIC 12 (Standing Interpretations Committee interpretation of
IAS 27 concerning “Consolidation — Special Purpose Entities” governing the consolidation of companies formed
to serve a specific purpose).
The European SPV purchases all trade receivables of the participating European companies (the “European
Portfolio”) on the basis of receivables purchase agreements, and may then refinance some or all of the purchased
receivables through a receivables loan agreement with conduits. The conduits make loans available to the European
SPV that are in turn intended to be refinanced through the issuance of commercial paper or, if commercial paper
financing is unavailable, pursuant to a committed credit facility. Although all receivables are generally sold in the
context of the sale of the receivables, only eligible receivables may be used as the basis for refinancing. After the
deduction of reserves, payment of the initial purchase price of these eligible receivables becomes due to the
respective subsidiaries of Klöckner & Co SE upon the sale of the trade receivables.
The reserves represent a second deferred purchase price, except in the case of the German country operations,
and do not become due until the trade receivables are settled. The reserves represent discounts on the receivables
purchased and are based on ratings provided by rating agencies. In the case of the German country operations, the
second part of the payment of the purchase price is due immediately upon the sale of the trade receivables since the
reserves are secured by a subordinated loan. This subordinated loan is granted directly to the European SPV by
Klöckner & Co SE (as legal successor of Klöckner & Co Verwaltungs GmbH following the Klöckner Intra-Group
Merger, as described below).
The U.S. special-purpose vehicle (the “U.S. SPV”) is a Delaware corporation established to purchase trade
receivables of the relevant subsidiaries under the U.S. ABS Program. The U.S. SPV, which is a subsidiary of
Namasco Metals, L.P. (the limited partnership of which Namasco Corporation is the general partner), is included in
the financial statements of the U.S. subgroup.
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The U.S. SPV purchases all trade receivables of the participating U.S. companies (the “U.S. Portfolio” and
together with the European Portfolio the “Receivables Portfolios”) on the basis of a receivables sale agreement, and
may then on-sell some or all of the purchased receivables to Wells Fargo Bank, N.A., and Bank of America, N.A., as
purchaser (together with its successors and assigns in such capacity, the “U.S. Purchaser”) pursuant to a receivables
purchase agreement. The proceeds received from the U.S. Purchaser are employed by the U.S. SPV to pay the
purchase price for the respective trade receivables.
Administration
After the “Klöckner Intra-Group Merger” (as described below), Klöckner & Co SE as the legal successor of
Klöckner & Co Verwaltung GmbH handles the administration and collection of the European receivables sold to the
European SPV under relevant receivable purchase agreements. Klöckner & Co SE as the “Servicer” has in turn
delegated this activity to its respective European subsidiaries that originate the receivables. Klöckner & Co SE has
assumed liability for the obligations of the Servicer as administrator and lender of the subordinate loan as well as for
the originators of the receivables to cover the eventuality that any of these companies will not be able to fulfill their
obligations under the European ABS Program. The administration and collection of the receivables sold under the
U.S. ABS Program is handled by Namasco Corporation and its delegees.
“Klöckner Intra-Group Merger” means in phase 1 the merger of Klöckner & Co Verwaltung GmbH into
Klöckner & Co International GmbH, subsequently in phase 2 the merger of Klöckner & Co International GmbH
into Multi Metal Beteiligungs GmbH, and subsequently in phase 3 the merger of Multi Metal Beteiligungs GmbH
into Klöckner & Co SE. The Klöckner Intra-Group Merger was consummated in March and May 2011.
Termination
Among other termination events, termination of the ABS Programs may be triggered subject to the performance
of the respective Receivables Portfolio. For this purpose certain ratios are defined with respect to three
categories of receivables: (i) diluted receivables (i.e., receivables which are either reduced, cancelled or adjusted or
which are subject to any specific counterclaim or defence whatsoever), (ii) delinquent receivables (i.e., receivables
as to which any payment remains unpaid for more than 61 to 90 days from the original due date for such payment
and which are not defaulted receivables) and (iii) defaulted receivables (i.e., receivables as to which an event of
bankruptcy has occurred and is continuing with respect to the respective obligor, or which should be written off as
uncollectible, or as to which any payment remains unpaid for 91 or more days from the original due date for such
payment). The European ABS Program may be terminated if, in each case on the basis of a three-month rolling
average in relation to the aggregate outstanding principal balance of the European Portfolio in the relevant time
period, the aggregate outstanding principal balance of diluted receivables exceeds 4.75%, the aggregate outstanding
principal balance of delinquent receivables exceeds 2.5%, and/or the aggregate outstanding principal balance of
defaulted receivables exceeds 2.0%. Respectively, the U.S. ABS Program may be terminated if, in each case on the
basis of a three-month rolling average in relation to the aggregate outstanding principal balance of the U.S. Portfolio
in the relevant time period, the aggregate outstanding principal balance of diluted receivables exceeds 4.5%, the
aggregate outstanding principal balance of delinquent receivables exceeds 2.5%, and/or the aggregate outstanding
principal balance of defaulted receivables exceeds 3.5%.
Furthermore, the European ABS Program includes provisions for termination if certain financial covenants
(gearing ratio, consolidated equity) are breached. Such financial covenants are essentially the same as the covenants
under the Senior Revolving Credit Facility Agreement and are made on the basis of the consolidated balance sheet
of Klöckner & Co SE.
Termination of any of the ABS Programs entails an obligation to repay all amounts owed under the terminated
ABS Program. In addition, a default of an individual company can result in the termination of the European ABS
Program solely with respect to such individual company in default; in such a case the European ABS Program
would otherwise remain in effect.
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RELATED PARTY TRANSACTIONS
Since April 2007, following the sale of the remaining shares held by our previous owners, all of our shares have
been held in free float. Based on a notification received by us, Norges Bank (Central Bank of Norway) has in the
past been our largest shareholder holding approximately 5.15% of our voting rights through mid-May of 2011 but
has since then dropped to 1.84% as a result of share lending arrangements (Deutsche Börse AG has allocated these
shares to non-free float pursuant to its own rules when Norges Bank held more than 5%).
Klöckner & Co SE’s related parties include the members of its management board and supervisory board, and
the members of governing bodies of subsidiaries, in each case including their family members, as well as those
entities over which the members of the Management Board or Supervisory Board of Klöckner & Co SE or their
close family members are able to exercise a significant influence or in which they hold a significant share of voting
rights. Furthermore, pursuant to IFRS 24, related parties include those entities with whom Klöckner & Co SE forms
an affiliated group or in which it holds an interest that enables it to exercise a significant influence over the business
policy of the associated company, as well as the principal shareholders in the Company, including their affiliates.
Klöckner & Co SE has business relationships with unconsolidated affiliates in the ordinary course of business
that do not differ from its relationships with unaffiliated enterprises. This includes in particular the pension fund of
the Debrunner Acifer Group, Switzerland, which leases real estate to our Swiss subsidiaries. The rent amounted to
EUR 1.15 million in the fiscal year 2010 (previous year: EUR 1.02 million). For a description of the remuneration of
our management and supervisory board members see “Management”.
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Overview
MANAGEMENT
The corporate bodies of Klöckner & Co SE are the management board (Vorstand), the supervisory board
(Aufsichtsrat) and the shareholders’ general meeting (Hauptversammlung). Klöckner & Co SE has a two-tier
management and control system consisting of the management board and the supervisory board. The two boards
function independently of each other. No person is permitted to be a member of both bodies simultaneously. The
powers vested in these bodies are governed in accordance with Regulation No. 2157/2001 on the Statute for a
European Company (Societas Europaea — SE), the German SE-Implementation Act (SE-Ausführungsgesetz
—SEAG), the German Stock Corporation Act (Aktiengesetz), our Articles of Association (Satzung) and the
respective rules of procedure (Geschäftsordnungen) of the management board and the supervisory board.
Our management board is solely responsible for managing Klöckner & Co SE in accordance with the laws of
the Federal Republic of Germany, the provisions of the Articles of Association, the rules of procedure of the
management board and the schedule of responsibilities (Geschäftsverteilungsplan), and must also take into account
resolutions adopted by the shareholders’ general meeting. Furthermore, the management board legally represents us
in our dealings with third parties. The management board is required to ensure the establishment and operation by
Klöckner & Co SE of an appropriate risk management and internal monitoring system to identify in a timely manner
any developments that might place our continued existence at risk. Our management board is further obliged to
report to the supervisory board. In particular, the management board has to inform the supervisory board on a
regular, timely and comprehensive basis about all relevant issues with respect to our planning, development of the
business, risks, risk management, strategic measures and compliance. In this regard, the management board is also
required to describe and explain ways in which the development of the business has deviated from plans and targets
that have been previously set forth. In addition, the chairman of the supervisory board is to be informed about any
other important developments.
Our supervisory board oversees and advises our management board and is responsible for appointing and
removing members of the management board. In addition, our supervisory board represents Klöckner & Co SE in
any transactions between a management board member and Klöckner & Co SE itself. While the management board
is required to submit regular reports on our day-to-day operations and fundamental corporate planning issues, the
supervisory board may also request special reports from the management board at any time. The supervisory board
generally may not exercise any management functions. However, according to our Articles of Association and the
rules of procedure of our management board, certain types of transactions may not be carried out by the
management board without the prior consent of the supervisory board. If the supervisory board refuses to consent
to such transactions contemplated by the management board, the management board can request that the
shareholders’ general meeting make the final decision.
In carrying out their duties, the members of our management and supervisory boards have to exercise the
standard of care of a diligent and conscientious business person. In complying with this standard of care, the
members of both boards have to take into account a broad range of considerations, including the interests of
Klöckner & Co SE as well as our shareholders, employees and creditors. In particular, the management board must
adhere to the shareholders’ right to equal treatment.
The German Stock Corporation Act (Aktiengesetz) prohibits individual shareholders and any other persons
from exercising any influence on Klöckner & Co SE to cause a member of the management board or the supervisory
board to take actions detrimental to Klöckner & Co SE. Anyone who uses his or her influence to cause a member of
the management board or the supervisory board, or an authorized signatory (Prokurist) or authorized representative
(Handlungsbevollmächtigter) of the Company, to act in a way that is detrimental to Klöckner & Co SE or its
shareholders is liable to Klöckner & Co SE and, as a consequence, is required to compensate us for any resulting
damages. The members of the management board and the supervisory board are also jointly and severally liable in
the event they breach their duties and cause damage to Klöckner & Co SE.
Where a breach of duty by members of the management board or the supervisory board results in damage to
Klöckner & Co SE, we may assert claims for compensation against the members of the management board or the
supervisory board; the management board represents us when claims are asserted against supervisory board
members, and the supervisory board represents us when claims are asserted against management board members.
According to a decision by the German Federal Supreme Court (Bundesgerichtshof), the supervisory board has a
duty to assert claims for compensation against the management board which are likely to have merit unless an
important company interest would conflict with such an assertion of claims and such grounds outweigh, or are at
least comparable to, the grounds in favor of an assertion of claims. However, in the event the relevant board entitled
to represent us decides not to pursue the claim, we must assert claims for damages against members of our
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management board or supervisory board, as the case may be, if our shareholders’ general meeting so resolves with a
simple majority. In addition, a minority of our shareholders whose aggregate shareholdings amount to 10% of the
share capital or a proportionate amount of EUR 1.0 million may then apply to the district court where our registered
office is located for the appointment of a special representative who will be assigned the task to assert claims for
damages if, in the view of the court, such appointment furthers the cause of pursuing such claims. If facts are present
that substantiate the suspicion that we are being damaged by dishonesty or gross violation of the law or our Articles
of Association by our management board or supervisory board, shareholders whose aggregate shareholdings
amount to 1% of the share capital or a proportionate amount of EUR 100,000 may apply to the stated district court
for permission to assert claims on their own behalf for damages of Klöckner & Co SE (Klagezulassungsverfahren).
Conditions for the admission of such a lawsuit include that the shareholders have made an unsuccessful request for
Klöckner & Co SE to file a suit within a reasonable period of time and that there is evidence to justify the
presumption that we have suffered damages due to dishonesty or gross violation of the law or our Articles of
Association. We are entitled at all times to assert a claim for damages on our own; if we file a suit, any pending
shareholders’ lawsuit relating to the admission of a lawsuit or the shareholders’ lawsuit itself becomes inadmissible.
We may only waive claims for damages asserted against members of our governing bodies or make an
out-of-court settlement if (i) at least three years have elapsed since the claim was asserted, (ii) such action is
approved by a shareholders’ resolution at our shareholders’ general meeting by a simple majority of votes and
(iii) there has not been an objection against such resolution recorded by a minority of shareholders owning in the
aggregate a total of at least 10% of the issued share capital.
Management Board
General
According to our Articles of Association, the management board comprises one or more members. The
number of management board members is otherwise determined by the supervisory board. The supervisory board
may also designate one member as the chairman and another member as the vice chairman of the management
board. At present, our management board consists of two members: Mr. Gisbert Rühl, the chairman of the
management board, and Mr. Ulrich Becker. We are at present evaluating to expand our management board to three
members, with the third member being responsible for the Americas.
Management board members are appointed by the supervisory board for a maximum term of five years.
Reappointments and extensions of the term of office are permissible. The supervisory board may revoke the
appointment of a member of the management board prior to the expiration of his term of office for good cause, as in
the case of a gross violation of duties or a vote of no confidence in the board member by the shareholders’ general
meeting, unless the vote of no confidence was made on patently subjective grounds. The supervisory board is also
responsible for the execution, amendment, and termination of all employment agreements with the members of the
management board.
Our management board members are subject to extensive non-competition obligations for the duration of the
time they serve on the management board. They are required to disclose any conflicts of interest to the supervisory
board without delay, and prior to accepting supervisory or advisory appointments, offices with power of representation
or other significant secondary employment at companies other than Klöckner & Co Group, they must
obtain the consent of the supervisory board.
In accordance with our Articles of Association, if two or more members are appointed to our management
board, we are represented by two members of our management board acting jointly or by one management board
member acting jointly with an authorized signatory (Prokurist). Notwithstanding the above, the supervisory board
may grant individual members of the management board the power to represent us alone and release that person
from the prohibition of multiple representation set forth in Section 181 2 nd alternative of the German Civil Code
(Bürgerliches Gesetzbuch — BGB).
Under the rules of procedure of the management board, each member of the board is assigned specific areas of
responsibility. The members of the management board are nevertheless jointly responsible for managing
Klöckner & Co Group. The management board constitutes a quorum when a meeting has been convened with
due notice and at least half of the members are present or vote. Resolutions are passed with a simple majority of the
votes cast unless other majorities are stipulated by statutory law, our Articles of Association or our internal rules of
procedure. In case of a deadlock, the chairman’s vote decides.
In accordance with the German Stock Corporation Act, our management board must submit regular reports to
the supervisory board, particularly on expected business policy and strategies, the profitability of operations,
day-to-day business and any other transactions that may be of material importance for our profitability or liquidity.
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Members
The following table sets out the name, age, position, year of appointment and the area of responsibility for the
current members of our management board:
Name Age Position
Gisbert Rühl........ 52 Chairman of the
management board
Ulrich Becker ....... 49 Member of the
management board
Year first
appointed/Year of
termination of
appointment
Operational and functional
areas of responsibility
2005 / 2012 Corporate Controlling
& Development/M&A;
Investor Relations &
Corporate
Communications;
Finance & Accounting;
Corporate Taxes;
Internal Audit; Human
Resources; Legal &
Compliance;
Management &
Personnel Development
2008 / 2013 Europe; North
America; Process
Management & IT;
International Product
Management & Global
Sourcing
Gisbert Rühl, 52. Mr. Rühl is the chairman of the management board of Klöckner & Co SE, and has functional
responsibility for Corporate Controlling & Development / M&A, Investor Relations & Corporate Communications,
Finance & Accounting, Corporate Taxes, Internal Audit, Human Resources, Legal & Compliance, and Management
& Personnel Development. After studying industrial engineering at Hamburg University, Mr. Rühl joined the
German consulting company Roland Berger & Partner GmbH as a management consultant in 1987. Thereafter he
was appointed managing director of Lion Gesellschaft für Systementwicklung mbH. After having occupied
management positions with Matuschka Capital GmbH and Coutinho, Caro & Co, Mr. Rühl joined RÜTGERS AG in
1993. He was appointed to the company’s management board and, among other duties, served as the chief executive
officer of RÜTGERS Automotive AG. In 1999 he moved to Babcock Borsig AG, where he accepted the office of a
management board member. Between 2002 and 2005, he was a partner with Roland Berger Strategy Consultants.
Since July 2005, Mr. Rühl has been the Chief Financial Officer of the Klöckner & Co Group. Since the change of the
legal form of Klöckner from a stock corporation (Aktiengesellschaft) into a Societas Europaea (SE) in August 2008,
he has served as the chief financial officer of the Klöckner & Co SE management board. Effective November 1,
2009, Mr. Rühl became CEO and chairman of the management board (and remained CFO).
In addition to board positions in various entities of the Klöckner & Co Group, Mr. Rühl is member of the
supervisory board of RWE Power AG.
Ulrich Becker, 49. Ulrich Becker has been a member of our management board since April 2008. On the
operating level he is responsible for Europe, North America, Process Management & IT and International Product
Management & Global Sourcing. Mr. Becker began his career in 1981 with Krupp Stahl AG, Duisburg, where he
had already participated in a trainee program in the sales and purchasing departments prior to beginning his studies.
Following his business administration studies, from 1988 onwards Mr. Becker worked as an assistant to the director
with Mannesmann Handel AG, Düsseldorf. After various management positions he was appointed a member of the
board of management for Mannesmann Handel AG in 1998, where he was responsible for the global tube sales. In
2001, Mr. Becker was appointed the chairman of the management board for Benteler Handel GmbH, Paderborn. In
2005, Mr. Becker changed his role within Benteler group and joined the management of Benteler Automobiltechnik
GmbH. In this capacity, he was responsible for under-carriage systems and the North American region. He
joined the management board of Klöckner & Co AG in April 2008 and since the change of the legal form of
Klöckner from a stock corporation (Aktiengesellschaft) into a Societas Europaea (SE) in August 2008, he has
served as a member of the Klöckner & Co SE management board.
In addition to board positions in various entities of the Klöckner & Co Group, Mr. Becker is member of the
advisory board of Wickeder Westfalenstahl GmbH.
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The members of the management board can be contacted at the business address of Klöckner & Co SE, Am
Silberpalais 1, 47057 Duisburg, Germany.
Remuneration of management board members
Management board remuneration basically consists of four components: a fixed annual salary, a variable
annual bonus, a variable three-year bonus, and a medium- to long-term virtual stock option (“VSO”) program. In
2009 and 2010, respectively, the service agreements with both members of the management board were amended;
as a consequence, both members of the management board are now compensated in accordance with the
remuneration system stipulated in the German Act on the Adequacy of Remuneration of Members of the
Management Board (Gesetz zur Angemessenheit der Vorstandsvergütung, “VorstAG”), which entered into force
in 2009.
For 2010, the fixed annual salary was EUR 600,000 for the management board chairman and EUR 480,000 for
the regular management board member. In addition to the aforementioned remuneration components, members of
the management board are entitled to defined-benefit or defined-contribution pension plans under the regulations of
the Essener Verband as well as to other benefits, including payment of insurance premiums and company cars, some
with a driver, etc.
The variable annual bonus is paid if the quantitative targets set jointly with the supervisory board at the
beginning of each fiscal year are met. For this purpose, target figures for EBITDA and cash flow from operating
activities linked to the Group’s budget were defined in fiscal year 2010. The variable three-year bonus is paid if the
qualitative targets set jointly with the supervisory board at the beginning of the three-year period are met. The
sustainable qualitative targets reflect the Group’s strategy and include growth targets (50% weight), targets relating
to business optimization (30% weight), and targets relating to improvements in the area of personnel and
management development (20% weight). Annual installments are made on the three year bonus for the years
2010 through 2012 (subject to later repayment if the criteria are ultimately not met). The decision as to whether the
targets have been met will be made in 2013. If 100% of the targets are met, the chairman of the management board
shall receive an annual bonus of EUR 225,000 and the regular management board member shall receive an annual
bonus of EUR 180,000, up to a maximum of 200% for the management board chairman and 133% for the regular
management board member. For the three-year bonus, the cap is also 200% or 133%, respectively.
The following overview gives a breakdown of claims to be allocated to 2010 for compensating individual
members of the management board.
2010
Gisbert Rühl,
CEO/CFO
Ulrich Becker,
COO Total
(EUR thousand)
Fixed components. . . ....................................
Bonuses*)
634 526 1,160
Current ............................................. 333 240 573
Midterm ............................................ 225 180 405
Share-based payment**) .................................. — (205) (205)
Total ................................................ 1,192 741 1,933
Issued VSO tranche 2010 (number of rights) ................... 120,900 60,000 180,900
Fair value tranche 2010***) ............................... 812 411 1,223
Remuneration attributable to current period ................. 2,004 1,357 3,361
Paid remuneration incl. Exercised VSO ....................... 1,409 870 2,279
*) 2010 compensation paid, less prior-year provision plus provision set aside at end of fiscal year 2010.
**) As of the effective date of the commitment and/or the date when the exercise conditions changed.
***) Fair value on the date when the respective tranche was issued.
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2009
Gisbert Rühl,
CEO/CFO
Ulrich Becker,
COO Total
(EUR thousand)
Fixed components. . . ....................................
Bonuses*)
436 496 932
Current ............................................. 70 469 539
Share-based payment**) .................................. 1,366 — 1,366
Total ................................................ 1,872 965 2,837
Issued VSO tranche 2010 (number of rights) ................... 65,100 60,000 125,100
Fair value tranche 2010***) ............................... 327 394 721
Remuneration attributable to current period ................. 833 1,359 2,192
Paid remuneration incl. Exercised VSO ....................... 724 1,347 2,071
*) 2009 compensation paid, less prior-year provision plus provision set aside at end of fiscal year 2009.
**) As of the effective date of the commitment and/or the date when the exercise conditions changed.
***) Fair value on the date when the respective tranche was issued.
The virtual stock option program agreed with the management board consisted in fiscal year 2010 of three
types: Type I (virtual stock option I) from 2006, originally consisted of five annual tranches. The strike price for the
first allotment in 2006 was the price for the initial public offering of EUR 16 per share in June 2006. This price
increases for each subsequent annual tranche by 5% of the previous year’s strike price, but is adjusted for any
dividend distributions and dilutive rights issues that occur in the interim. Type I VSOs (VSO I) have been adapted to
satisfy the requirements of VorstAG. For this reason, the waiting periods were extended to three to five years. The
waiting period for the first 1/3 of a tranche is now three years, for the second 1/3 of the tranche four years and for the
third 1/3 of the tranche five years from the allotment date. The individual tranches are allocated annually.
Klöckner & Co SE’s cash-payment obligation corresponds to the difference between the average price of the last 30
trading days (Xetra trading, Deutsche Börse AG) prior to the exercise of the option and the underlying strike price,
but is limited to a maximum of EUR 37 per option (cap).
Type II of the VSO Program (VSO II) originally also had five tranches, which were allocated each year beginning
on January 1, 2009. The virtual stock options in the allocated tranches of type II can and/or could be exercised
annually, but no sooner than 30 stock-trading days after the annual general meeting following the tranche allotment.
After the end of the waiting period, the options for the allocated tranches can be exercised in full or in part at any time.
For the type II VSOs, the strike price is equal to the average Klöckner & Co share price over the last 30 trading days of
the year before allocation of the respective tranche. The maximum cash payment (cap) is limited to EUR 25 per option.
Type III VSOs are basically identical to type II VSOs, but like type I VSOs provide for waiting periods of three
to five years. In the interim, VSO II has also been adapted to satisfy the requirements of VorstAG. Consequently, the
type II VSOs issued, since January 1, 2011 or still to be issued also provide for waiting periods of three to five years
and therefore are identical to the type III VSOs.
The total management board remuneration in the Klöckner & Co SE individual and consolidated financial
statements pursuant to Section 285, No. 9 and Section 314, paragraph 1, No. 6 of the German Commercial Code
totalled EUR 1,933 thousand in 2010 (2009: EUR 3,553 thousand, including the then chairman of the management
board), of which EUR -205 thousand (2009: EUR 1,366 thousand) is related to the fair value of the virtual stock
options agreed in fiscal year 2010. The negative value of the VSOs agreed in 2010 reflect the longer VSO waiting
periods agreed to as part of the amendments to the employment agreement with management board member Ulrich
Becker. These were converted from type II to type III VSOs effective January 1, 2011.
The defined benefit obligations in accordance with IFRS for current members of the management board as of
December 31, 2010 amounted to EUR 2.142 million (2009: EUR 2.488 million). The obligations are funded by
reinsurance policies with cash surrender values of EUR 1.217 million as of December 31, 2010 (2009:
EUR 1.316 million). In 2010 current service cost amounted to approximately EUR 332 thousand (2009: EUR 246
thousand).
In 2010, the supervisory board decided, effective January 1, 2011, to raise the management board chairman’s
annual base salary from EUR 600,000 to EUR 720,000, his annual bonus from EUR 225,000 to EUR 270,000 and
his three-year bonus from EUR 675,000 to EUR 765,000. At the same time, it decided to modify the management
board chairman’s pension, making it equal to 50% of his annual base salary and the previous EUR 272,000 cap was
eliminated. Of the total amount of employer contributions to pensions or pension funds in 2010 of EUR 957
thousand, EUR 693 thousand is related to this amendment. In addition, the cap on reimbursable contributions to
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pensions and disability insurance for the regular management board member was raised from EUR 120,000 to
EUR 150,000. Of this amount, EUR 120,000 is currently being applied to defined-contribution pension plans under
the regulations of the Essener Verband that are included in the aforementioned pension provisions.
Shareholdings, loans and other legal relationships
As of March 31, 2011, the members of the management board held 112,500 shares (Gisbert Rühl) and
6,790 shares (Ulrich Becker), respectively. As of March 31, 2011, the members of the management board held
Convertible Bonds in an aggregate nominal amount of EUR 2,800,000, thereof EUR 2,150,000 held by Gisbert
Rühl and EUR 650,000 held by Ulrich Becker. No loans were extended to management board members. The
members of our management board are insured by a directors and officers’ liability insurance (D&O insurance). We
currently pay a premium for this insurance amounting to approximately EUR 0.9 million per year. The policy covers
damages to Klöckner & Co SE resulting from violations of their duties by members of the management board and
the supervisory board. The D&O insurance policy taken out by the Company for its members of the supervisory
board does not provide for a deductible.
Supervisory Board
General
Pursuant to our Articles of Association, the supervisory board of Klöckner & Co SE is comprised of six
members who are appointed at the shareholders’ general meeting of Klöckner & Co SE. The shareholders’ general
meeting appoints the members of the supervisory board for a term until the close of the annual general meeting of
shareholders which resolves on the ratification of actions for the fourth financial year after the term of office is
commenced, with the financial year in which the term of office commences not being counted, however, for no
longer than for a period of six years. Reappointments are permissible. When electing a supervisory board member,
the shareholders’ general meeting can simultaneously appoint a substitute member to take his or her place if the
supervisory board member retires before the end of his or her term of office. If a substitute member (Ersatzmitglied)
joins the supervisory board due to the resignation of one of its members, the term of office of the new member ends
with the expiration of the term of office of the retired member. Currently, no substitute members are appointed.
Supervisory board members may not exercise any management board function or perform advisory work for any
important competitor of the Klöckner & Co Group.
In accordance with Section 9 para. 5 of our Articles of Association, supervisory board members and substitute
members may resign from office by giving four weeks’ notice and submitting a written declaration to the chairman
of the supervisory board or to the management board. Resignation may be submitted without notice on presentation
of good cause.
The supervisory board elects a chairman and a deputy chairman from among its members for the duration of
their respective terms of office on the supervisory board. If the chairman or a deputy chairman resigns during their
term of office, the supervisory board will elect a successor without delay. The chairman of the supervisory board
coordinates the work of the supervisory board and its committees, maintains regular contact with the management
board and briefs the supervisory board on the reports provided by the management board where such reports relate
to events that are of material importance for assessing the situation, development and management of the
Klöckner & Co SE.
Members
The current members of the supervisory board of Klöckner & Co SE, their principal functions and their
memberships in administrative, management and supervisory bodies or as partners outside of Klöckner & Co SE are
set forth in the following table. These memberships remain effective as of the date hereof unless otherwise noted.
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Name/membership
in management bodies Position
Prof. Dr. Dieter H. Vogel ....
Lindsay Goldberg Vogel
GmbH (managing partner)
Dr. Michael Rogowski . . ....
Voith AG (since October
2010: Voith GmbH; former
chairman of the
management board)
Robert J. Koehler ..........
SGL CARBON SE
(chairman of the
management board)
Dr. Jochen Melchior ........
former STEAG AG
(former chairman of the
management board)
Hauke Stars ..............
Managing Director of
Hewlett-Packard (Schweiz)
GmbH
Chairman of the supervisory
board
Deputy Chairman of the
supervisory board
Member of the supervisory
board
Member of the supervisory
board
Member of the supervisory
board
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Year first
appointed
Other supervisory board
mandates or mandates in
comparable German and
foreign controlling bodies
2006 HSBC Trinkaus &
Burkhardt AG
Ernst & Young AG
HDI Gerling-Industrie
Versicherung AG
Bertelsmann Stiftung
Bertelsmann
Verwaltungsgesellschaft
mbH
denkwerk GmbH
sevenload GmbH (until
December 2010)
Debrunner & König
Holding AG (until May
2008)
Bertelsmann AG (until
December 2007)
Gerling-Konzern
Versicherungs-
Beteiligungs-AG (until
September 2007)
mobilcom AG (until
February 2007)
telunico Holding AG (until
February 2007)
WCM Beteiligungs- und
Grundbesitz AG (until
January 2006)
2006 HDI V.a.G./Talanx AG
Carl Zeiss AG
Vattenfall Europe AG
Freudenberg & Co.
Adolf Würth GmbH & Co.
KG
Voith AG (until March
2010)
2007 Benteler International AG
Heidelberger
Druckmaschinen AG
Demag Cranes AG
Lanxess AG
2007 National Bank AG
Ernst & Young GmbH
Universitätsklinikum Essen
AöR
Schauenburg Technology SE
Schauenburg-Gruppe
AXA Service AG (until
April 2010)
2011 GfK SE

Name/membership
in management bodies Position
Dr. Hans-Georg Vater . . . ....
HOCHTIEF AG (former
member of the management
board)
Member of the supervisory
board
Year first
appointed
Other supervisory board
mandates or mandates in
comparable German and
foreign controlling bodies
2007 MEDION AG
Athens International Airport
S.A.
HAPIMAG AG (until
April 2011)
DEMATIC Holding S.à r.l.
OWA Odenwald
Faserplattenwerk GmbH
Universitätsklinikum Essen
AöR
Hochtief Construction AG
SAB Spar- und
Anlageberatung AG
Illbruck GmbH
ENRO Geothermie AG
HOCHTIEF
Concessions AG (until April
2010)
Prof. Dr. Dieter H. Vogel. Prof. Vogel (born in 1941) holds the degree of Diplom-Ingenieur (Certified
Engineer) from the Technische Universität Darmstadt (Technical University of Darmstadt) and he earned a PhD
from the Technische UniversitätMünchen (Technical University of Munich), where he was appointed an honorary
professor in 2004. After working in various management positions at Bertelsmann, Pegulan and BAT from 1972 to
1985, he was appointed as a member of the management board of Thyssen AG in 1986 and chairman of the
management board in 1996. At the end of 1998, Prof. Vogel set out on his own as a managing partner of Lindsay
Goldberg Vogel GmbH in Düsseldorf, which represents the interests of the private-equity fund Lindsay Goldberg in
Europe. Prof. Vogel also serves as chairman of the board of trustees of the Bertelsmann Foundation, deputy
chairman of Bertelsmann’s shareholders’ committee and member of the administrative board of HSBC Trinkaus &
Burkhardt AG.
Robert J. Koehler. Mr. Koehler (born in 1949) holds the degree of Betriebswirt (MBA) from the FH Mainz
(Mainz University of Applied Sciences) and the FH Frankfurt (Frankfurt University of Applied Sciences). He began
his professional career at the former Hoechst AG. At Hoechst, he held several management positions, both in
Germany and abroad, most recently as head of corporate planning for the Hoechst Group. In 1992, Mr. Koehler
became chairman of the management board of SGL Carbon AG (now: SGL Carbon SE). He holds supervisory
board positions in the listed companies Lanxess AG, Demag Cranes AG and Heidelberger Druckmaschinen AG.
Dr. Michael Rogowski. Dr. Rogowski (born in 1939) holds the degree of Technischer Diplom-Betriebswirt
(MBA) from the Technische Universität Karlsruhe (Karlsruhe Technical University). He began his professional
career with the Singer Group in 1969. In 1974 he joined the company now known as Voith GmbH. In 1987, he
became Voith GmbH’s spokesperson and in 1992 chairman of the management board. From 2000 to 2010, he served
as chairman of Voith AG’s supervisory board and its shareholders’ committee. From 1996 to 1998, Dr. Rogowski
served as president of the Verband Deutscher Maschinen- und Anlagenbau e.V. (German Engineering Association/
VDMA) and from 2001 to 2004 Dr. Rogowski was president of the Bundesverband der Deutschen Industrie
(Federation of German Industries/BDI). He holds several supervisory board positions, including at HDI V.a.G./
Talanx AG and at Carl Zeiss AG.
Dr. Jochen Melchior. Dr. Melchior (born in 1942) holds the degree of Diplom-Kaufmann (MBA) from the
University of Cologne (Universität Köln) and also studied at Cambridge University. Dr. Melchior started his
professional career at Massey-Ferguson and later held various management positions at the Quandt Group and with
the former AEG-Telefunken. In 1980, he was hired as head of corporate development for Ruhrkohle AG and in 1987
became a member of the management board of STEAG AG. From 1995 to 2004, Dr. Melchior served as the
chairman of STEAG AG’s management board. Dr. Melchior currently holds several supervisory board positions,
including at National-Bank AG, at the Universitätsklinikum Essen (University Hospital, where he is chairman), at
the Schauenburg Group and an advisory board position at Ernst & Young GmbH.
Hauke Stars. Mrs. Stars (born in 1967) holds the degree of Diplom-Ingenieurin (Certified Engineer) with a
specialization in Computer Science from the Universität Magdeburg (University of Magdeburg) and a Master of
Science from the University of Warwick in the UK. From 1992 to 2004, she served in management positions in the
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IT division at the Bertelsmann Group and at ThyssenKrupp group companies. In 2004, she joined Hewlett-Packard,
where she served as director and member of the management board of Hewlett-Packard Nederland B.V. and in 2007
became managing director of Hewlett-Packard (Schweiz) GmbH. Mrs. Stars is also a member of the supervisory
board and the executive committee of the supervisory board of GfK SE.
Dr. Hans-Georg Vater. Dr. Vater (born in 1942) holds a Master’s Degree in Economics from the university of
Freiburg/Br. After working as an Assistant Auditor at PwC Accounting Firm from 1969 to 1971, he held various
management positions from 1972 to 1987 with Mannesmann Demag AG and at the BATIG Group, most recently as
the commercial director of Pegulan AG. In 1988, Dr. Vater was named a member of the management board of MAN
Gutehoffnungshütte AG, where he later became the chairman of the management board. From 1996 to 2006,
Dr. Vater held the position as CFO on the management board (Vorstand) of HOCHTIEF AG. He holds several nonexecutive
supervisory board or equivalent board positions such as deputy chairman of the supervisory board of
Medion AG, member of the board of directors of Athens International Airport S.A.
The appointment of Prof. Dr. Dieter Vogel and Dr. Michael Rogowski as well as Hauke Stars continues through
the conclusion of the annual general meeting of shareholders which resolves on the discharge of the supervisory
board for the 2015 financial year. The appointment of Dr. Jochen Melchior and Dr. Hans-Georg Vater continues
through the conclusion of the annual general meeting of shareholders which resolves on the discharge of the
supervisory board for the 2011 financial year. The appointment of Mr. Robert J. Koehler continues through the
conclusion of the annual general meeting of shareholders which resolves on the discharge of the supervisory board
for the 2012 financial year.
The members of the supervisory board can be contacted at the business address of Klöckner & Co SE, Am
Silberpalais 1, 47057 Duisburg, Germany.
Supervisory board committees
The supervisory board may form committees from among its members and charge them with the performance
of individual tasks that are within the supervisory board’s responsibility by law. The provisions of the Articles of
Association and the bylaws applicable to the supervisory board apply analogously to the supervisory board
committees within the framework of the legal regulations. Currently, our supervisory board has designated an audit
committee and an executive committee.
Tasks performed by the audit committee include the following: (i) preparing the review of the annual and
consolidated financial statements, including the joint management report, as well as reviewing the management
board’s proposal for the appropriation of profits and the dependent company report; (ii) determining the focal points
of the audit if necessary, and negotiating the auditor’s fee; (iii) dealing with accounting issues and reviewing
accounting in general; (iv) dealing with risk management issues and reviewing risk management and the risk
management system in general; (v) reviewing the independence of the auditor; (vi) compliance issues; and
(vii) dealing with issues relating to the management of the internal auditing department. Dr. Hans-Georg Vater
(Chairman), Dr. Michael Rogowski and Prof. Dr. Dieter H. Vogel are the current members of this committee. The
audit committee meets at least twice per calendar year. In order to have a quorum, all of the audit committee’s
members must participate in the voting.
The executive committee maintains regular contact with the management board in the periods between
supervisory board meetings, coordinates the supervisory board’s work, and prepares the supervisory board
meetings. In line with the rules of procedure, the executive committee also performs the function of a personnel
committee, a committee for urgent matters and a nomination committee making recommendations to the supervisory
board for proposals on the election of supervisory board members by the shareholders’ general meeting. The
executive committee also has the following tasks: (i) granting, in urgent matters, the supervisory board’s consent to
the management board for transactions for which such consent is required by law, the Articles of Association or the
rules of procedure of the management board; (ii) resolving on urgent matters not set out in Section 107 para. 3
Sentence 2 of the German Stock Corporation Act that require a decision by the supervisory board or the committee
representing it in order to prevent substantial disadvantages for Klöckner & Co SE and which cannot be postponed
until the next meeting of the responsible body or the conclusion of a written resolution procedure; (iii) granting
consent to supervisory or advisory mandates of members of the management board in companies in which
Klöckner & Co SE does not hold an interest, as well as to all offices as authorized representatives of any company
and to any other secondary employment of relevance and granting exemptions from non-competition obligations;
(iv) granting loans to members of the management board and their dependants; (v) regulating and overseeing
personnel matters concerning the management board, in particular the execution, amendment or cancellation of
employment contracts with members of the management board; (vi) preparing the appointment and removal of
members of the management board; (vii) stipulating and reviewing the adequacy of the compensation of members
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of the management board; and (viii) performing special tasks that the full supervisory board assigns to the executive
committee on a case-by-case basis. Prof. Dr. Dieter H. Vogel (Chairman), Dr. Michael Rogowski and Dr. Hans-
Georg Vater are the current members of the executive committee. In order to have a quorum, all of the executive
committee’s members must participate in the voting.
Remuneration of the members of the supervisory board
According to Section 14 of our Articles of Association, each member of the supervisory board is entitled to a
fixed annual remuneration in the amount of EUR 17,000. The fixed annual remunerations of the chairman and the
deputy chairman of the supervisory board amount to EUR 51,000 and EUR 34,000, respectively. The members of
the supervisory board also receive a performance bonus in the amount of EUR 150 for every EUR 1.0 million by
which the group profit (Konzernüberschuss) in the respective financial year for which the remuneration is being
paid exceeds the sum of EUR 50.0 million. The variable performance bonus for each member of the supervisory
board cannot exceed the amount of the fixed annual remuneration by more than 100%. In addition, the members of
the supervisory board receive an attendance fee of EUR 2,000 for each meeting of the supervisory board and its
committees that they attend; the chairman of the supervisory board and the chairman of a supervisory board
committee each receive three times, his or her deputy and the deputy chairman of a supervisory board committee
twice, the attendance fee. The remuneration is payable at the conclusion of the annual general meeting of
shareholders at which the supervisory board receives the consolidated annual financial statements for the preceding
financial year or decides on their approval.
The total remuneration of the members of the supervisory board in accordance with Section 314 para. 1 no. 6 of
the German Commercial Code (Handelsgesetzbuch — HGB) for the 2010 financial year amounted to EUR 382
thousand, compared to EUR 339 thousand for the 2009 financial year.
Pensions or retirement payments are not made to supervisory board members in their function as such. As there
are no corresponding entitlements, no reserves have been set up for this purpose.
Shareholdings, loans and other legal relationships
As at March 31, 2011, members of our supervisory board held shares and/or convertible bonds issued by us as
follows:
Member of supervisory board Number of Shares
Nominal amount of
Convertible Bond
Dr. Melchior ............................................. 2,858 —
Dr. Rogowski ............................................ — EUR150,000
Dr. Vater ................................................ 2,858 —
Dr. Vogel. ............................................... — EUR750,000
The members of the supervisory board are covered by the same directors and officers’ liability insurance
(D&O insurance) as the members of the management board. The policy, which does not provide for a deductible,
covers damages to Klöckner & Co SE resulting from violations of their duties by members of the supervisory board
and the management board.
No loans were extended to supervisory board members.
Specific Information on the Members of the Management Board and the Supervisory Board
No public incriminations and/or sanctions have been imposed in the last five years by statutory or regulatory
authorities (including designated professional bodies) on members of our management board and the supervisory
board. None of the members of our management board or supervisory board have been convicted of criminal acts of
fraud and no court of law has ever disqualified the members of the management board or supervisory board from
acting as a member of the administrative, management or supervisory body of an enterprise or for serving in
management or for managing the business of an issuer for at least the previous five years. No member of our
management board or supervisory board has in the last five years been involved in any insolvency, receivership or
liquidation (other than solvent liquidations of dormant Group companies) proceeding in their capacity as a member
of an administrative, management or supervisory body or as a partner or founder. The management and supervisory
board members are not related in any way.
The members of our management and supervisory boards have not been and are not currently involved in any
transactions of the Klöckner & Co Group outside of its business activities or in other transactions by Klöckner & Co
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Group whose form or substance is atypical during the current and the past financial year or, with respect to earlier
financial years, in such transactions that have not yet been completed.
There are no potential conflicts of interest between any duties to the Company of the members of the
management board or the supervisory board and their private interests and/or other duties.
Except as described below, none of the members of our management board or supervisory board has executed a
contract for services with a company in our group that provides for benefits on termination of their service
relationship beyond the granting of the agreed variable compensation on a pro-rata basis and other benefits
described in Version 1 of our virtual stock option program under “—Remuneration of management board members”
above. If a change of control occurs, i.e. if a threshold of 30% of voting rights is exceeded, the management board
members have the right to terminate their employment contracts. If these rights are exercised, they will be entitled to
their individual target salaries (including target bonuses) for the remaining life of their respective contracts, capped
at three times the annual salary. Furthermore, all virtual stock options granted but not issued up to this point in time
vest immediately and may be exercised in full.
Shareholders’ General Meeting
Our shareholders’ general meetings are held either at our registered office, in a German city with a stock
exchange or at any other major German city with a population of more than 100,000. In accordance with
Regulation No. 2157/2001 on the Statute for a European Company (SE), the shareholders’ general meeting must be
held at least once every calendar year and within the first six months after the completion of a financial year. The
shareholders’ general meeting is generally convoked by the management board at least 30 days prior to the day by
the end of which shareholders must register to attend the shareholders’ general meeting, by publication in the
electronic version of the Federal Gazette (elektronischer Bundesanzeiger). Each share entitles the holder thereof to
one vote in the shareholders’ general meeting. Voting rights may be exercised by proxy. If neither a credit institute
nor a shareholders association is so authorized, then powers of attorney can be issued in writing, by fax, or by
electronic means if so stipulated by the management board of Klöckner & Co SE. Details pertaining to proxies are
communicated when the shareholders’ general meeting is convened.
If required in our interests, the shareholders’ general meeting can also be convoked extraordinarily by the
supervisory board and can always be convoked by shareholders whose aggregate holdings together amount to 5% of
our registered capital. In accordance with Section 122 of the German Stock Corporation Act, shareholders holding
5% of the share capital who have held their shares for at least three months may request a shareholders’ general
meeting in written form and present their request and the reason for their request to the management board. In
addition, the respective shareholders must prove that they will hold their shares until a decision with respect to their
request is reached. If their request is denied, a court may authorize the shareholders who filed the request to convoke
the shareholders’ general meeting. The convocation or the notification has to refer to the authorization.
Under German stock corporation law, resolutions of fundamental importance require both a simple majority of
the votes cast and a majority of at least three-quarters of the share capital represented at the voting on the resolution.
Resolutions of fundamental importance include, in particular:
capital increases with an exclusion of subscription rights;
capital reductions;
the creation of authorized or contingent capital;
split-ups (Spaltung), spin-offs (Ausgliederung), as well as the transfer of all of the company’s assets;
the execution of intercompany agreements (Unternehmensverträge) (primarily controlling agreements and
profit/loss transfer agreements);
a change in our legal form; and
the dissolution of Klöckner & Co.
In the case of an SE, pursuant to Art. 59 para. 1 SE Regulation, amendments to the Articles of Association
require a resolution of the shareholders’ general meeting adopted with a majority of at least two thirds of the votes
cast, provided that the legal provisions applicable to stock corporations do not stipulate or allow for larger majority
requirements. Therefore, according to the prevailing opinion, those amendments to the Articles of Association
which pursuant to the German Stock Corporation Act already require a mandatory majority of the subscribed capital
of three quarters now require, in the case of an SE, a majority of three quarters of the votes (validly) cast. According
to Section 51 sentence 1 SEAG the statutes of an SE may stipulate that the simple majority of votes cast is sufficient
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for a resolution of the shareholders’ general meeting effecting amendments to the Articles of Association, provided
that at least half of the subscribed capital is represented. This does not apply with regard to an alteration of the
corporate purpose, a resolution on the transfer of the registered office or in cases where a larger majority of the
subscribed capital is required by mandatory statutory law as set forth in Section 51 sentence 1 SEAG. The Articles
of Association of Klöckner & Co SE contain a provision to this effect in Section 19 para. 2.
Corporate Governance
The German Corporate Governance Code (“Codex”) contains recommendations and suggestions for managing
and monitoring companies listed on a stock exchange in Germany with regard to shareholders and the
shareholders’ general meeting, the management board and supervisory board, transparency, accounting, and the
audit of financial statements. It is based on internationally and nationally recognized standards for good and
responsible corporate governance. The purpose of the Codex is to make the German corporate governance system
transparent for investors. The Codex was passed by the Government Commission of the German Corporate
Governance Code on February 26, 2002 and has been amended since then, most recently on May 26, 2010.
German stock corporation law requires that the management board and supervisory board of a listed company
annually declare either that the recommendations of the Codex were and are currently being complied with, or in the
alternative declare which recommendations were not or are not currently being followed. This declaration is to be
made permanently accessible to shareholders. However, deviations from the suggestions (as opposed to recommendations)
contained in the Codex need not be disclosed.
Our management board and supervisory board support the Codex’s objectives to promote responsible,
transparent corporate management and control aimed at achieving a sustained increase in Klöckner & Co SE’s
shareholder value. Our management board and supervisory board made the following declaration of conformity on
December 15, 2010, pursuant to Section 161 of the German Stock Corporation Act, which continues to be accurate
as of the date of this prospectus:
The recommendations of the German Corporate Governance Code, as amended, have been complied with and
are being complied with apart from the following exceptions:
Article 3.8 of the Code (directors’ and officers’ (D&O) liability insurance, deductible for board members)
The D&O policy taken out by the Company for its Supervisory Board members does not provide for a
deductible. The Management Board and the Supervisory Board do not expect a deductible to affect the quality of the
Supervisory Board’s work.
Article 4.2.3 sentence 8 of the Code (stock options and similar arrangements)
The virtual stock option program (phantom stocks) for the Management Board does not make reference to
comparison parameters because in Europe there are no suitable comparable companies in the steel distribution
sector from which such comparison parameters could be derived.
Article 4.2.3 sentence 13 of the Code (payments promised in the event of premature termination of
Management Board member’s contract due to a change of control)
The payments promised in the event of premature termination of the Management Board members’ contracts
due to a change of control have not been and are not formally limited to 150 % of the severance payment cap. If a
Board member ceases his Management Board activity due to a change of control, the remaining outstanding
(maximum of three) annual tranches of the virtual stock option program will be allocated to him. As a precautionary
measure only and in view of the uncertainty regarding treatment and valuation of (virtual) stock options in applying
this recommendation, the Company assumes that this compensation component may cause the threshold of 150 %
of the severance payment cap to be exceeded.
Article 5.4.5 of the Code (number of Supervisory Board mandates in non-group companies)
One member of the Supervisory Board of the Company, who is a member of the Management Board of a listed
company, was an elected member of four Supervisory Boards of non-group listed companies as well as of one
company with similar requirements at the time the German Corporate Governance Code was amended in the
summer of 2009. The new recommended number of three such mandates thus has been and is exceeded. The
Supervisory Board intends to give due consideration to this new recommendation when nominating Supervisory
Board members in the future.
This declaration, as well as past declarations, is available on our website at http://www.Kloeckner.de.
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GENERAL INFORMATION ON THE COMPANY
Company Formation, Name, Registered Office and Financial Year
Our business history goes back to 1906 when Peter Klöckner founded the “Klöckner & Co” trading company
in Duisburg. See “Business —Our History”. After several changes in our shareholder and corporate structure,
Klöckner & Co AG went public in an initial public offering in June 2006.
We have been founded in the legal form of a limited liability company (GmbH) in 2005 by Multi Metal
Investment S.à.r.l. as “LGB-K-Germany NCeins GmbH” and were registered in the commercial register of the local
court in Duisburg on March 11, 2005 under registration number HRB 17571. In May 2006 we were converted into
the legal form of a stock corporation (Aktiengesellschaft) concurrent with a change of our legal name to “Klöckner &
Co Aktiengesellschaft”; such change in legal form was registered with the commercial register on June 7, 2006.
Since August 2008, we have been organized as a Societas Europaea or SE (European Law Stock Corporation) and
are governed by Regulation No. 2157/2001 on the statute for a SE, the German SE-Implementation Act
(SE-Ausführungsgesetz —SEAG), the German Stock Corporation Act (Aktiengesetz) and our articles of association
(Satzung). Klöckner & Co SE is registered with the commercial register of the local court (Amtsgericht) of
Duisburg, Germany, under registration number HRB 20486. Our registered office is Am Silberpalais 1, 47057
Duisburg, Germany, tel. +49-203-307-0. Our financial year is the calendar year. We appear generally als
“Klöckner & Co” in our business dealings.
Duration and Dissolution
The Company has perpetual existence. However, except in the event of insolvency, it can be dissolved by a
resolution of our shareholders’ meeting with a three-quarters majority of the share capital represented. If that were
to happen, any Company assets remaining after the adjustment of liabilities according to the requirements of the
German Stock Corporation Act (Aktiengesetz) would be distributed among our shareholders on a proportional basis
based on the numbers of shares held by each.
Corporate Purpose
According to Section 4 of our Articles of Association, the corporate purpose of the Company is
(a) the distribution and trading of steel, metal and synthetic products as well as their manufacture and processing
and
(b) the acquisition and administration of participations of all kinds, in particular in companies whose corporate
purpose includes the activities described under (a).
The Company may form subsidiaries in Germany and abroad, establish branches and assume participations in
other companies to the extent they are active in the Company’s field of business or are beneficial to its corporate
purpose, including for the purpose of the development and subsequent sale of such companies. The Company may
represent companies in which it participates, consolidate them under a unified management and conclude intercompany
agreements for this purpose. The Company may outsource or convey its business in full or in part to
affiliated companies.
Independent Auditors
The independent auditors of our annual unconsolidated and consolidated financial statements for the financial
years ended December 31, 2008 and 2009 were KPMG Hartkopf + Rentrop Treuhand KG, Wirtschaftsprüfungsgesellschaft,
Barbarossaplatz 1a, 50674 Cologne, Germany (“KPMG Treuhand KG”) and for the financial year
ended December 31, 2010 KPMG AG Wirtschaftsprüfungsgesellschaft, Klingelhöferstrasse 18, 10785 Berlin,
Germany (“KPMG AG”). KPMG AG is the parent company of KPMG Treuhand KG, and Klöckner & Co SE has
decided that due to the size of its business KPMG AG is better suited as auditor. KPMG Treuhand KG and
KPMG AG (jointly, “KPMG”) audited our annual unconsolidated financial statements prepared in accordance with
the German Commercial Code (“HGB”) and our annual consolidated financial statements prepared in accordance
with the International Financial Reporting Standards (“IFRS”) of the International Accounting Standards Board for
the financial years ended December 31, 2008, 2009 and 2010, respectively, and have issued unqualified audit
opinions on these financial statements. KPMG is a member of the German Chamber of Auditors
(Wirtschaftsprüferkammer).
KPMG AG has also been appointed as our independent auditor for the financial year ending December 31,
2011.
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Disclosure Requirements for Shareholdings
Due to our status as listed company in Germany numerous disclosure provisions of the German Securities
Trading Act (Wertpapierhandelsgesetz-WpHG) may apply.
The general rule requires that anyone who, due to an acquisition, sale or other event, obtains, exceeds, or no
longer holds 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% of the voting rights in an issuer whose home country
(Herkunftsstaat) is Germany must promptly, and within no later than four trading days, notify the issuer and
concurrently the BaFin (Section 21(1) WpHG).
In connection with the notice requirements, the German Securities Trading Act contains various provisions
designed to ensure that shareholdings in listed companies are attributed to the person who actually controls the
voting rights associated with such shares (Section 22 WpHG). For example, shares owned by a third party are
attributed to a party who is subject to the notice requirement if such party controls the third party (Section 22(1)
sentence 1 No. 1 WpHG). The same applies to shares held by a third party for the account of the party who is subject
to the notice requirement or of a company controlled by such party (Section 22(1) sentence 1 No. 2 WpHG).
Furthermore, any coordinated conduct between shareholders, i.e. any kind of cooperation among shareholders that
is designed to effect a permanent and material change in the business strategy of the issuer (acting in concert) can
result in an attribution of voting rights; the cooperation does not have to be specifically about the exercise of voting
rights (Section 22(2) sentence 1 WpHG). Coordination in individual cases will not trigger the attribution of voting
rights (Section 22(2) sentence 2 WpHG).
Any party required to make disclosures within the meaning of Sections 21, 22 WpHG whose volume of voting
rights from shares meets or exceeds the 10% threshold or a higher threshold must notify the issuer whose home
country is Germany, within twenty trading days, of its intentions with respect to the acquisition as well as identify
the source of the funds used to make the acquisition and, in the process, make certain disclosures stipulated in the
German Securities Trading Act (Section 27a WpHG).
Moreover, anyone who directly or indirectly holds financial instruments that grant the holder the right to
unilaterally acquire, under a legally binding agreement, previously issued voting shares of an issuer whose home
country is Germany must promptly upon obtaining, exceeding, or no longer holding 5%, 10%, 15%, 20%, 25%,
30%, 50% or 75%, and within no later than four trading days, provide notice thereof to the issuer and to the BaFin
(Section 25 WpHG). The voting rights from shares and the voting rights obtainable through other financial
instruments will be aggregated for the purposes of Section 25. In instances where a disclosure pursuant to
Sections 21 and 22 WpHG is or was made, an additional disclosure pursuant to Section 25 WpHG will not be
necessary unless the aggregate amount of voting rights from or relating to all securities meets, exceeds or falls
below a further threshold mentioned in Section 21(1) sentence 1 WpHG. Approximately as of 1 January 2012, the
Bill on the Strengthening of Investor Protection and the Improvement of Financial Markets (Gesetz zur Stärkung des
Anlegerschutzes und zur Verbesserung der Funktionsfähigkeit des Kapitalmarkts) will extend the disclosure
requirements for holders of financial instruments in Section 25 WpHG to holders of “other instruments” (which
do not qualify as “financial instruments”) that grant the holder the right to acquire voting shares.
Additionally, the Bill on the Strengthening of Investor Protection and the Improvement of Financial Markets
will insert a new Section 25a into the German Securities Trading Act. Under Section 25a WpHG, anyone who
directly or indirectly holds financial instruments or other instruments other than those mentioned in Section 25
WpHG that do not grant an enforceable right to acquire previously issued voting shares of an issuer whose home
country is Germany but still make such acquisition (at least economically) possible must promptly upon obtaining,
exceeding, or no longer holding 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75%, and within no later than four trading
days, provide notice thereof to the issuer and to the BaFin. Circumstances under which positions in instruments
make an acquisition of voting shares possible are exemplified in, but not limited to, two statutory provisions
(Section 25a(1) sentence 2 WpHG). An acquisition is accordingly possible, if the counterparty could hedge its risks
arising under the instrument in whole or in part by holding voting shares or if the instrument provides for the right or
the obligation to acquire voting shares (Section 25 WpHG). The voting rights from shares, the voting rights
obtainable through financial instruments and other instruments that grant the holder an enforceable right to acquire
the voting shares, and the voting rights obtainable through instruments which do not grant an enforceable right to
acquire voting shares but make such acquisition possible will be aggregated for the purposes of Section 25a WpHG.
A domestic issuer (Inlandsemittent) must publish all such aforementioned notices promptly, though no later
than three trading days after receiving the notice, through an electronically operated information dissemination
system, a news agency, a news provider, a print medium, and a website for the financial markets (jointly known as a
media bundle). In that regard, at least one of those media must allow an active dissemination throughout Europe.
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Furthermore, the domestic issuer must promptly, though not prior to publication, transmit the notice to the company
register (Unternehmensregister) for storage. At the same time, the issuer must notify the BaFin of the publication.
Failure to give notice pursuant to Sections 21, 22 WpHG may result in the disqualification of the rights
(including voting rights and dividend rights) attaching to the shares that belong to the notifying party or, in certain
cases (Section 22(1) sentence 1 No. 1, No. 2), to shares whose voting rights are attributable to the said party for the
duration of the failure (Section 28 sentence 1 WpHG) and, in certain cases involving the willful or grossly negligent
breach of disclosure obligations, for an additional six months thereafter (Section 28 sentence 3 WpHG). In addition,
a fine may be imposed for failure to comply with any of the aforementioned notice requirements.
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Issued Share Capital
DESCRIPTION OF SHARE CAPITAL
Upon our formation as a result of the conversion into a stock corporation registered on June 7, 2006 (see
“General Information on the Company —Company Formation, Name, Registered Office and Financial Year”), our
share capital amounted to EUR 100,000,000. In our initial public offering our share capital was increased in June
2006 against cash contribution by EUR 16,250,000 and subsequently remained unchanged in our conversion into an
SE. In September 2009 we increased our share capital by EUR 50,000,000 against cash contribution. Our issued
share capital recorded in the commercial register (Handelsregister) as of the date of this prospectus thus amounts to
EUR 166,250,000, divided into 66,500,000 registered shares. The shares are issued as no par value shares, each such
share with a notional value of EUR 2.50.
Following the implementation of the capital increase that is the subject of this prospectus, our issued share
capital will amount to EUR 249,375,000, divided into 99,750,000 shares.
Certification and Transferability of Shares
Our shares are represented by global share certificates deposited with Clearstream Banking AG, Mergenthalerallee
61, 65760 Eschborn, Germany. Shareholders are not entitled to issuance of actual share certificates. Our
shares are freely transferable.
General Information on Capital Measures
A resolution of our general shareholders’ meeting (Hauptversammlung) is required to increase our issued share
capital. Our Articles of Association (Satzung) provide that the dividend entitlement of new shares issued in
connection with a capital increase may deviate from the provisions of the German Stock Corporation Act
(Aktiengesetz). A resolution of our shareholders’ meeting may also authorize the management board to increase
the issued share capital with the approval of our supervisory board within a specified period not exceeding five years
(authorized capital). The amount of the capital increase may not exceed half of the issued share capital existing at
the time the resolution of our general shareholders’ meeting is registered. Our shareholders may also resolve to
create conditional capital, but only for specific purposes, such as granting conversion rights or options to holders of
convertible bonds and certain similar instruments, with the aim of preparing for a merger with another company or
granting subscription rights to employees or members of management of the Company or an affiliated company. In
no event may the nominal amount of the conditional capital exceed half of the issued share capital existing at the
time of the resolution on the conditional capital increase. The nominal amount of the conditional capital for granting
subscription rights to employees and members of management of the Company or an affiliated company may also
not exceed 10% of the issued share capital existing at the time of the resolution on the conditional capital increase.
Under German stock corporation law, the shareholders’ resolutions described above each require a majority of
votes cast and (i) for an ordinary capital increase, a simple majority of the issued share capital represented at the
meeting where the vote is taken (except if shareholders’ subscription rights are excluded, see below), or (ii) for the
creation of authorized or conditional capital, a majority vote of at least three-quarters of the issued share capital
represented at such general shareholders’ meeting. A resolution to reduce the issued share capital likewise requires
a majority of the votes cast and a majority of at least three quarters of the issued share capital represented at the
meeting where the vote is taken.
In the case of an SE, pursuant to Art. 59 para. 1 SE Regulation, amendments of the Articles of Association
(which includes capital measures) require a resolution of the shareholders’ general meeting adopted with a majority
of at least two thirds of the votes cast, provided that the legal provisions applicable to stock corporations do not
stipulate or allow for larger majority requirements. Therefore, according to the prevailing opinion, those amendments
of the Articles of Association which pursuant to the German Stock Corporation Act already require a
mandatory majority of the subscribed capital of three quarters now require, in the case of an SE, a majority of three
quarters of the votes (validly) cast. According to Section 51 sentence 1 SEAG the statutes of an SE may stipulate
that the simple majority of votes cast is sufficient for a resolution of the shareholders’ general meeting effecting
amendments to the Articles of Association, provided that at least half of the subscribed capital is represented. This
does not apply with regard to an alteration of the corporate purpose, a resolution on the transfer of the registered
office or in case where a larger majority of the subscribed capital is required by mandatory statutory law (Section 51
sentence 1 SEAG). The Articles of Association of Klöckner & Co SE contain with Section 19 para. 2 a provision to
this effect. This reduction of the majority of votes casts does, however, not change the additional mandatory
requirement of a three quarters majority of the issued share capital represented that is required for the creation of
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authorized or conditional capital, an exclusion of shareholders’ preemptive rights and a resolution to reduce the
issued share capital.
Statutory Subscription Rights
The German Stock Corporation Act provides that all shareholders generally have subscription rights with
respect to newly issued shares (as well as to options to subscribe to newly issued convertible bonds, bonds with
warrants, profit participation certificates and income bonds). Subscription rights are generally freely transferable
and may — upon admission to trade — be traded on the German stock exchanges during a specific period prior to
the expiration of the subscription period. The general shareholders’ meeting may exclude subscription rights by a
majority of at least three-quarters of the issued share capital represented at the meeting approving the resolution.
The exclusion of subscription rights further requires a report by our management board that sets forth the
justification for the decision by showing that our interest in excluding subscription rights outweighs the interest of
shareholders in the subscription rights being granted. Without such a justification, subscription rights for the
issuance of new shares may be excluded if the share capital is being increased for cash consideration, the amount of
the capital increase does not exceed 10% of our existing share capital and the issue price of the new shares is not
substantially lower than the market price.
Exclusion of Minority Shareholders
Sections 327a et seq. of the German Stock Corporation Act concerning squeeze-outs provide that a shareholder
who owns 95% of the issued share capital (principal shareholder) may request that the general shareholders’
meeting of a German stock corporation resolve to transfer the shares of the other minority shareholders to the
principal shareholder in return for an adequate cash compensation. The amount of this cash compensation to be paid
to the minority shareholders must take account of the German stock corporation’s financial condition at the time the
resolution is passed. The full value of the German stock corporation, which is normally calculated using the
capitalization of earnings method (Ertragswertmethode) but takes into account also the market price (as determined
by stock exchange trading), is decisive for determining the compensation amount.
In addition to the provisions on the squeezing out of minority shareholders, Sections 319 et seq. of the German
Stock Corporation Act provide for the integration (Eingliederung) of stock corporations. Under these provisions,
the general shareholders’ meeting of a German stock corporation may resolve to integrate a company if 95% of the
shares of such company are held by the future principal company. The shareholders excluded from the integrated
company are entitled to an adequate compensation that must generally be granted in the form of shares of the
principal company. The amount of the compensation must be calculated using what is known as the merger value
ratio between the two companies, in other words the exchange ratio that would be adequate were the two companies
to merge. In contrast to the squeeze-out of minority shareholders, integration is only possible when the future
principal company is a stock corporation with a stated domicile in Germany.
Capital Increase for the New Shares
The shares offered hereby, which are governed by the laws of the Federal Republic of Germany, will be issued
by utilizing our Authorized Capital in accordance with Section 4 para. 5a of our Articles of Association. The
Authorized Capital was approved by resolutions of our annual general meeting on May 26, 2010, and entered in the
commercial register of the local court of Duisburg on July 23, 2010 (see “—Authorized Capital”). On May 26,
2011, our management board resolved, with the approval of our supervisory board on May 26, 2011, to make use of
this authorization and issue for the offering 33,250,000 New Shares, each such share with a notional value of
EUR 2.50 (no par value shares). Once the implementation of the capital increase has been entered in the commercial
register on or about June 8, 2011, our issued share capital will amount to EUR 249,375,000, and the Authorized
Capital, on the basis of the authorization mentioned above, will have been fully used and amount to zero.
Authorized Capital
The management board of the Company is authorized, with the consent of the supervisory board, to increase
the share capital in one or more installments on or before May 25, 2015 by up to a total of EUR 83,125,000 in
aggregate by the issue of up to 33,250,000 new non-par value registered shares against contributions in cash or in
kind (Authorized Capital). The new shares can be assumed by a credit institution or an enterprise being active
pursuant to section 53, para. 1, sentence 1, or section 53b, para. 1, sentence 1 or section 53b, para. 7, of the German
Banking Act (‘financial institution’) or by a syndicate of such credit or financial institutions, combined with an
obligation to offer them to the shareholders for subscription (‘indirect subscription right’). In principle, the
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shareholders have subscription rights. The management board is, however, authorized, with the consent of the
supervisory board, to exclude the statutory subscription right of shareholders in the following cases:
(aa) to settle fractional shares;
(bb) if the capital is increased against contributions in cash and the total proportionate amount of the share capital
attributable to the new shares for which the subscription right is being excluded does not exceed 10% of the
share capital existing at the time of the resolution or — if this value is lower — at the time of the management
board’s decision on the exercise of this authorization, and the issue price of the new shares is not substantially
lower than the market price of the shares already listed at the time of the management board’s final fixing of the
issue price. This 10% threshold shall include the proportionate amount of the share capital attributable to
shares of Klöckner & Co SE that were issued or sold by the Company with the exclusion of subscription rights
in direct or analogous application of section 186, para. 3, sentence 4, of the German Stock Corporation Act
during the term of this authorization up to the time of its exercise or are attributable to the subscription rights
based on warrant-linked and/or convertible bonds issued on the basis of authorizations other than the preceding
in direct or analogous application of section 186, para. 3, sentence 4, of the German Stock Corporation Act
during this period, with the exception of those shares intended to service convertible bonds issued respectively
on the basis of the resolution adopted as agenda item 9 of the Company’s annual general meeting of June 20,
2007, and of the resolution adopted as agenda item 7 of the Company’s annual general meeting of May 26,
2009;
(cc) insofar as necessary in order to grant the holders of such warrants or warrant obligations or the creditors of such
conversion rights or obligations that were or will be issued by the Company or group companies a subscription
right as they would be entitled to after exercising their rights or obligations; and
(dd) in capital increases against contributions in kind, in which case the exclusion of the subscription right shall be
limited to a maximum of 20% of the Company’s share capital existing at the time of the resolution or — if this
value is lower — at the time of the management board’s decision on the exercise of this authorization.
Furthermore, if the combined total proportionate amount of the share capital attributable to shares of
Klöckner & Co SE to be issued under this authorization with the exclusion of the shareholders’ subscription
rights against payment in kind, together with (i) other new shares issued during the term of this authorization
against payment in kind with the exclusion of subscription rights and (ii) shares to be issued on the basis of
convertible and/or warrant-linked bonds issued during the term of this authorization against payment in kind
with the exclusion of subscription rights, shall not exceed 20% of the Company’s share capital existing at the
time of the resolution or — if this value is lower — at the time of the management board’s decision on the
exercise of this authorization.
The management board is authorized, with the consent of the supervisory board, to determine the further
details of the capital increase from the Authorized Capital. The supervisory board is authorized to amend the
wording of the Articles of Association in accordance with the respective use of Authorized Capital and, if the
Authorized Capital should not be used, or not fully used, by May 25, 2015, upon expiration of the authorization.
The Company’s annual general meeting of May 20, 2011 resolved to amend the Authorized Capital as set forth
below (“Authorized Capital Amendment 2011”).
The Company’s annual general meeting of May 20, 2011 resolved to revoke the authorizations for the
management board to exclude subscription rights in accordance with lit. (bb) and lit. (dd) above. The management
board was directed to refer this resolution for registration in the Company’s commercial register only if the
Company’s annual general meeting has resolved to create the new authorizations for exclusion of subscription
rights in the Authorized Capital pursuant to agenda item 9.2 of the annual general meeting of May 20, 2011, and if,
(i) the period for challenging this resolution pursuant to Section 246 para. 1 of the German Stock Corporation Act
has expired without a complaint being raised against the validity of this resolution or, (ii) in case such a complaint is
raised within the prescribed period, the complaint has been rejected with legally binding effect, or the court has
ruled through a legally binding decision on a motion by the Company that the raising of the complaint does not stand
in the way of the registration of the resolution and/or defects in the resolution do not impact the validity of the
registration.
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The following authorizations for exclusion of subscription rights were added to the Authorized Capital
resolved by the annual general meeting under agenda item 10 of May 26, 2010:
The management board is authorized, with the consent of the supervisory board, to exclude the statutory
subscription right of shareholders:
if the capital is increased against contributions in cash and the total proportionate amount of the share capital
attributable to the new shares for which the subscription right is being excluded does not exceed 10% of the
share capital existing at the time of the annual general meeting’s resolution on this authorization for exclusion
of subscription rights or — if this value is lower — at the time of the management board’s decision on the
exercise of this authorization for exclusion of subscription rights, and the issue price of the new shares is not
substantially lower than the market price of the shares already listed at the time of the management board’s
final fixing of the issue price. The 10% threshold shall include the proportionate amount of the share capital
attributable to shares of Klöckner & Co SE that (i) were issued or sold by the Company with the exclusion of
subscription rights in direct or analogous application of Section 186, para. 3, sentence 4, of the German Stock
Corporation Act during the term of this authorization for exclusion of subscription rights up to the time of its
exercise, or (ii) are attributable to the subscription rights based on warrant-linked and/or convertible bonds
issued on the basis of authorizations other than the preceding in direct or analogous application of Section 186,
para. 3, sentence 4, of the German Stock Corporation Act during the term of this authorization for exclusion of
subscription rights up to the time of its exercise with exclusion of subscription rights, with the exception of
those shares intended to service convertible bonds issued respectively on the basis of the resolution adopted as
agenda item 9 of the Company’s annual general meeting of June 20, 2007, of the resolution adopted as agenda
item 7 of the Company’s annual general meeting of May 26, 2009, or of the resolution adopted as agenda
item 7 of the Company’s annual general meeting of May 26, 2010; and
in capital increases against contributions in kind, in which case the exclusion of the subscription right shall be
limited to a maximum of 20% of the Company’s share capital existing at the time of the annual general
meeting’s resolution on this authorization for exclusion of the subscription right or — if this value is lower —
at the time of the management board’s decision on the exercise of this authorization for exclusion of the
subscription right.
The total of the shares to be issued under the Authorized Capital with the exclusion of subscription rights,
taking into account other shares that will be sold or issued after May 20, 2011, by the Company with the exclusion of
subscription rights, or that are to be issued after May 20, 2011, based on warrant-linked and/or convertible bonds
issued with the exclusion of subscription rights, must not exceed a proportionate amount of the share capital of
EUR 33,250,000.00 (equivalent to 20% of the current share capital).
In other respects, the authorized capital resolved by the annual general meeting under agenda item 10 of
May 26, 2010, remains unchanged.
Assuming completion of the Offering, the above resolution has become redundant as our Authorized Capital
will be fully used up; upon registration of the capital increase that is the subject matter of this prospectus we will not
file for registration with the commercial register the amendment of the Authorized Capital described above.
The offering of the New Shares that is the subject of this prospectus is based on the Authorized Capital
described above. Upon completion of the offering and assuming the issuance of all New Shares offered, our
Authorized Capital will have been fully used and amount to zero.
Conditional Capital
Our shareholders’ meeting has resolved the following conditional capitals:
Conditional Capital 2007 (as amended 2010)
The share capital of the Company is subject to a conditional increase of up to EUR 16,625,000.00 by the issue
of up to 6,650,000 new non-par value registered shares with dividend rights from the beginning of the business year
in which they are issued. The conditional capital shall serve to grant subscription and/or conversion rights to the
holders of warrant-linked and/or convertible bonds that were issued by the Company or a group company in
accordance with the authorization of the Company’s annual general meeting of June 20, 2007, as amended with the
authorization of the Company’s annual general meeting of May 26, 2010. The issue of the new shares shall be
effected at the option price or conversion price determined in accordance with the resolution of the annual general
meeting of the Company held on June 20, 2007 in relation to item 9 of the agenda. The conditional capital increase
shall only take place to the extent that the holders and/or creditors of subscription or conversion rights choose to
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exercise these rights or to the extent that the holders with a conversion obligation fulfil this obligation and to the
extent that no cash settlement is granted and no own shares or shares created from authorized capital are used to
satisfy this obligation. The management board shall be authorized to determine the further details of the execution
of a conditional capital increase. This conditional capital serves as a basis for the convertible bond that we issued in
July 2007 and described below under “—Convertible Bonds”.
Conditional Capital 2009 (as amended 2010)
The share capital of the Company is subject to a conditional increase of up to EUR 16,625,000.00 by the issue
of up to 6,650,000 new non-par value registered shares with dividend rights from the beginning of the business year
in which they are issued. The conditional capital shall serve to grant shares to satisfy subscription and/or conversion
rights of the holders of warrant-linked and/or convertible bonds that were issued by the Company or a group
company in accordance with the authorization of the Company’s annual general meeting of May 26, 2009, as
amended with the authorization of the Company’s annual general meeting of May 26, 2010. The issue of the new
shares shall be effected at the option price or conversion price determined in accordance with the resolution of the
annual general meeting of the Company held on May 26, 2009 in relation to item 7 of the agenda. The conditional
capital increase shall only take place to the extent that the holders and/or creditors of subscription or conversion
rights choose to exercise these rights or to the extent that the holders with a conversion obligation fulfil this
obligation and to the extent that no cash settlement is granted and that no own shares or shares created from
authorized capital are used to satisfy this obligation. The management board shall be authorized to determine the
further details of the execution of a conditional capital increase. This conditional capital serves as a basis for the
convertible bond that we issued in June 2009 and described below under “—Convertible Bonds”.
Conditional Capital 2010 (as amended 2011)
The share capital of the Company is subject to a conditional increase of up to EUR 33,250,000 by the issue of
up to 13,300,000 new non-par-value registered shares with dividend rights from the beginning of the business year
in which they are issued. The conditional capital shall serve to grant shares to satisfy subscription and/or conversion
rights and/or obligations of the holders of warrant-linked and/or convertible bonds that are issued by the Company
or a group company in accordance with the authorization of the Company’s annual general meeting of May 26,
2010, adopted under agenda item 7. The issue of the new shares shall be effected at the option price or conversion
price determined in accordance with the resolution of the annual general meeting of the Company held on May 26,
2010 in relation to item 7 of the agenda. If warrant-linked and/or convertible bonds are issued by the Company or a
group company in accordance with the authorization resolved under agenda item 7 of the Company’s annual general
meeting of May 26, 2010, for the purpose of acquiring convertible bonds issued by the Company or a group
company, the new shares are issued from the conditional capital against contribution of the respective (partial)
convertible bond by the respective holder of that (partial) convertible bond as contribution in kind. The number of
shares to be issued against contribution of the respective (partial) convertible bond is derived from the exchange
ratio determined on the basis of the authorization resolved under agenda item 7 of the Company’s annual general
meeting of May 26, 2010. The conditional capital increase shall only take place to the extent the holders and/or
creditors of subscription or conversion rights choose to exercise these rights or to the extent that holders with a
conversion or warrant obligation fulfil such obligation, and to the extent that no cash settlement is granted and no
own shares or shares created from other conditional capital or from authorized capital are used to satisfy this
obligation. The management board shall be authorized to determine the further details of the execution of a
conditional capital increase.
The Company’s annual general meeting of May 20, 2011 resolved that the Conditional Capital 2010 resolved
by the annual general meeting of the Company under agenda item 8 on May 26, 2010 will be cancelled in the
amount of EUR 16,625,000.00 and adjusted so that the Company’s share capital will be subject to a conditional
increase of only up to EUR 16,625,000.00 through the issue of 6,650,000 registered no-par-value shares.
The management board was instructed to file this resolution in the Company’s commercial register only if the
Company’s annual general meeting has resolved, in accordance with agenda item 7 of the annual general meeting of
May 20, 2011, to partially cancel the authorization to issue warrant-linked and/or convertible bonds granted by the
resolution adopted as agenda item 7 of the Company’s annual general meeting of May 26, 2010, and to create a new
authorization to issue warrant-linked and/or convertible bonds, and if (i) the period for challenging this resolution
pursuant to Section 246 para. 1 of the German Stock Corporation Act has expired without a complaint being raised
against the validity of this resolution or (ii), in case such a complaint is raised within the prescribed period, the
complaint has been rejected or withdrawn with legally binding effect.
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Conditional Capital 2011
The Company’s annual general meeting of May 20, 2011 resolved as follows:
The share capital of the Company is subject to a conditional increase of up to EUR 33,250,000.00 through the
issue of up to 13,300,000 new registered no-par-value shares with entitlement to profits from the beginning of the
financial year in which they are issued. The conditional capital serves the purpose of granting shares to satisfy
subscription and/or conversion rights and/or obligations of the holders of warrant-linked and/or convertible bonds
that are issued by the Company or a group company in accordance with the authorization of the Company’s annual
general meeting of May 20, 2011, adopted under agenda item 7. The issue price of the new shares issued shall be
equivalent to
the warrant or conversion price to be determined respectively on the basis of this authorization, in case the new
shares are issued to satisfy subscription and/or conversion rights and/or obligations of the holders of warrantlinked
and/or convertible bonds that are issued by the Company or a group company in accordance with the
authorization of the Company’s annual general meeting of May 20, 2011, adopted under agenda item 7;
the conversion price to be determined on the basis of this authorization, in case the new shares are issued to
creditors of convertible bonds that are issued based on the resolution under agenda item 9 of the Company’s
annual general meeting of June 20, 2007;
the conversion price to be determined on the basis of this authorization, in case the new shares are issued to
creditors of convertible bonds that are issued based on the resolution under agenda item 7 of the Company’s
annual general meeting of May 26, 2009;
the conversion price to be determined on the basis of this authorization, in case the new shares are issued to
creditors of convertible bonds that are issued based on the resolution under agenda item 7 of the Company’s
annual general meeting of May 26, 2010.
In addition, the conditional capital serves the purpose of issuing shares to creditors of convertible bonds issued
based on the resolution under agenda item 9 of the Company’s annual general meeting of June 20, 2007, or based on
the resolution under agenda item 7 of the Company’s annual general meeting of May 26, 2009, or based on the
resolution under agenda item 7 of the Company’s annual general meeting of May 26, 2010, in case of an adjustment
of the conversion ratio.
If warrant-linked and/or convertible bonds are issued by the Company or a group company in accordance with
the authorization of the Company’s annual general meeting under agenda item 7 on May 20, 2011, for the purpose of
acquiring convertible bonds issued based on the resolution under agenda item 9 of the Company’s annual general
meeting of June 20, 2007, or based on the resolution under agenda item 7 of the Company’s annual general meeting
of May 26, 2009, or based on the resolution under agenda item 7 of the Company’s annual general meeting of
May 26, 2010, the new shares are issued from the conditional capital against deposit of the respective (partial)
convertible bond by the respective holder of that (partial) convertible bond as payment in kind. The number of
shares to be issued against deposit of the respective (partial) convertible bond is derived from the conversion ratio
determined on the basis of the authorization resolved under agenda item 7 of the Company’s annual general meeting
of May 20, 2011.
The conditional capital increase will only take place to the extent that the respective holders and creditors of
subscription and conversion rights make use of these rights, or to the extent that holders with a conversion or warrant
obligation fulfil such obligation, and insofar as no cash settlement is granted or own shares or shares created from
other conditional capital or from authorized capital are used for servicing purposes. The management board is
authorized to establish the further details of the implementation of a conditional capital increase (Conditional
Capital 2011).
The registration of the Conditional Capital 2011 is still pending as at the date hereof.
In connection with the resolution on the Authorized Capital Amendment 2011 and the Conditional Capital
2011, the annual general meeting of May 20, 2011 also resolved, inter alia, that para. 5a of section 4 of the Articles
of Association shall become para. 7 of section 4, that a new para. 6 shall be included, and that para. 6 to 8 of section 4
shall become para. 8 to 10 of section 4 of the Articles of Association. The registration of the resolved changes to the
Articles of Association is still pending as at the date hereof. Accordingly, the numbering of the paragraphs of
section 4 of our Articles of Association has not yet changed as at the date hereof. For the avoidance of doubt, any
reference in this prospectus to our Articles of Association thus relates to the version effective as at the date hereof.
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Convertible Bonds
We issued a convertible bond in the nominal amount of EUR 325 million in 2007. In June 2009, we issued
another convertible bond in the nominal amount of EUR 97.9 million; in December 2010, we issued another
convertible bond in the nominal amount of EUR 186.2 million. See “Material Agreements —Convertible Bonds”
for more details.
The Company’s annual general meeting of May 20, 2011 resolved that the authorization of the management
board to issue warrant-linked and/or convertible bonds granted by the resolution adopted as agenda item 7 of the
Company’s annual general meeting of May 26, 2010, is cancelled to the extent that it was not exercised in the issue
of the convertible bond in December 2010. The cancellation shall take effect only if and when the new authorization
to issue warrant-linked and/or convertible bonds, proposed for resolution under agenda item 7, has been resolved
and either (i) the period for challenging this resolution pursuant to Section 246 para. 1 of the German Stock
Corporation Act has expired without a complaint being raised against the validity of this resolution or (ii), in case
such a complaint is raised within the prescribed period, the complaint has been rejected or withdrawn with legally
binding effect.
In addition, the Company’s annual general meeting of May 20, 2011 resolved the following: The management
board is authorized to issue bearer warrant-linked and/or convertible bonds or combinations of these instruments
(hereinafter referred to collectively as “bonds”) on one or several occasions, including simultaneously in separate
tranches, until May 19, 2016, in the total nominal amount of up to EUR 750,000,000.00 with or without a maximum
term, and to grant to the holders of the bonds warrants or conversion rights to a total of up to 13,300,000 registered
no-par-value shares of the Company with a proportionate amount of the share capital of up to EUR 33,250,000.00,
in accordance with the respective conditions of the bonds (hereinafter “bond conditions”). The bonds can be issued
against payment in cash and/or in kind.
The bonds can be issued in euro or the statutory currency of an OECD member country — restricted to the
equivalent value of the maximum euro amount of EUR 750,000,000.00. They can also be issued by companies with
registered offices within or outside of Germany in which Klöckner & Co SE holds a direct or indirect majority
interest (hereinafter “group companies”). In this event, the management board is authorized, with the consent of the
supervisory board, to assume a guarantee for the bonds on behalf of Klöckner & Co SE and to respectively grant to
creditors of warrant-linked bonds and to holders of convertible bonds warrants and conversion rights to new shares
of Klöckner & Co SE and to issue other declarations and undertake actions necessary for a successful issue.
The bond conditions may provide for an obligation to convert or to exercise a warrant at the end of the term or
at an earlier date, even if bonds are issued by group companies.
In principle, the shareholders have a subscription right to the bonds. The bonds can also be assumed by a credit
institution or an enterprise active pursuant to Section 53, para. 1, sentence 1, or Section 53b, para. 1, sentence 1 or
Section 53b, para. 7, of the German Banking Act (hereinafter “financial institution”) or by a syndicate of such credit
or financial institutions, together with an obligation to offer them to the shareholders for subscription. The
management board is, however, authorized to exclude the shareholders’ subscription rights to the bonds with the
consent of the supervisory board
if the bonds are issued against payment in cash and the management board reaches the decision, after a
mandatory examination, that the issue price is not substantially lower than the theoretical market value of the
bonds determined in accordance with recognized actuarial methods. However, this only applies insofar as the
shares to be issued to service the warrants and conversion rights or obligations associated with the bonds do not
exceed a total of 10% of the Company’s share capital existing at the time of the resolution or — if this value is
lower — at the time when the authorization is exercised. This 10% threshold shall include the proportionate
amount of the share capital attributable to shares of Klöckner & Co SE that (i) were issued or sold by the
Company with the exclusion of subscription rights in direct or analogous application of Section 186, para. 3,
sentence 4, of the German Stock Corporation Act during the term of this authorization up to the time of its
exercise or (ii) are attributable to the subscription rights based on warrant-linked and/or convertible bonds
issued on the basis of authorizations other than the preceding in direct or analogous application of Section 186,
para. 3, sentence 4, of the German Stock Corporation Act during the term of this authorization up to the time of
its exercise with exclusion of subscription rights, with the exception of those shares intended to service
convertible bonds issued respectively on the basis of the resolution adopted as agenda item 9 of the Company’s
annual general meeting of June 20, 2007, of the resolution adopted as agenda item 7 of the Company’s annual
general meeting of May 26, 2009, and of the resolution adopted as agenda item 7 of the Company’s annual
general meeting of May 26, 2010 (the “existing bonds”);
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in order to exclude fractional shares, arising due to the subscription ratio, from the subscription right of the
shareholders;
to the extent that they are issued against payments in kind, including for the purpose of acquiring existing
bonds or receivable claims against the Company or a group company; and
insofar as necessary in order to grant the holders of such warrants or warrant obligations, or the creditors of
such conversion rights or obligations as were or will be issued by the Company or group companies, a
subscription right matching that which would be due to them after exercising their rights or obligations.
The total of the shares to be issued under bonds issued based on this authorization or another authorization with
exclusion of subscription rights, taking into account other shares sold or issued by the Company with exclusion of
subscription rights during the term of this authorization, must not exceed a proportionate amount of the share capital
of EUR 33,250,000.00 (equivalent to 20% of the current share capital).
In an issue of convertible bonds, the holders of the convertible bonds receive the right or, if a conversion
obligation is provided for, assume the mandatory conversion of their convertible bonds, in accordance with the bond
conditions, for shares of the Company. The conversion ratio is determined by dividing the nominal amount of a
partial bond by the fixed conversion price of one share of the Company. The bond conditions can also stipulate that
the conversion ratio is determined by dividing the issue price by the fixed conversion price of one share of the
Company if the issue price is less than the nominal amount. The conversion ratio can in all cases be rounded up or
down to the next whole number. Otherwise, provision can be made for fractional shares to be combined and/or
settled for cash; provision can further be made for an additional cash payment. The bond conditions may also
provide for a variable conversion ratio, whereby the conversion price is calculated based on future market prices
within a particular price range. If convertible bonds are issued against payment in kind, the value of the respective
in-kind payment must be equal to the conversion price, but shall in no event be less than the lowest issue price of the
shares to be granted.
In an issue of warrant-linked bonds, one or more warrants are attached to each bond entitling the holder to
subscribe to shares of Klöckner & Co SE in accordance with the bond conditions determined by the management
board. For euro-denominated warrant-linked bonds issued by the Company, the bond conditions may provide for the
fact that the warrant price fixed in accordance with this authorization may also be settled through transfer of partial
bonds and, if necessary, an additional cash payment. The proportionate amount of the share capital attributable to
the shares to be subscribed per partial bond must not exceed the nominal amount of this partial bond. Where
fractions of shares arise, provision may be made whereby these fractions are added together in accordance with the
bond conditions — with an additional payment where necessary — in order to subscribe whole shares.
Notwithstanding Sections 9, para. 1, and 199 of the German Stock Corporation Act, the respective warrant or
conversion price to be fixed must amount to at least 80% of the volume- weighted average stock market price of the
shares of the Company in the XETRA trading system of the Frankfurt Stock Exchange (or a comparable successor
system) on the fixing date of the conditions of the bonds in the period from the opening of trading until the final
fixing of the conditions.
Notwithstanding Section 9, para. 1, of the German Stock Corporation Act, the warrant or conversion price can
be adjusted with value-preserving effect on the basis of an antidilution clause as specified in the bond conditions if
the Company — up until the expiration of the warrant or conversion period — increases the share capital and grants
a subscription right to its shareholders or issues or guarantees further bonds and the holders of existing warrants or
warrant obligations or of conversion rights or obligations are not granted a subscription right. The bond conditions
can also provide for a value-preserving adjustment of the warrant or conversion price for other actions of the
Company that can lead to a dilution of the value of the warrants or conversion rights.
The bond conditions may provide for the right of the Company — in the event of the exercise of warrants or in
the event of conversion — not to grant any shares, but to pay a cash amount instead. The bond conditions may
further provide for the right of the Company to grant shares of the Company to bond creditors as full or partial
settlement of the cash amount due. The subscription or conversion rights of the holders of bonds, as well as the
claims arising from a mandatory conversion or warrant exercise by bondholders, can otherwise be fulfilled by
delivering own shares of the Company or by issuing new shares from existing authorized capital or from authorized
or conditional capital and/or a regular capital increase to be resolved at a later date.
The management board is authorized to fix the precise calculation of the warrant or conversion price, as well as
further details concerning the issue and features of the bonds and the bond conditions or, respectively, to establish
these particulars in consultation with the executive bodies of the bond-issuing group Company, particularly with
respect to the interest rate, offer price, term and denomination, subscription or conversion ratio, reasons for a
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conversion or warrant obligation, fixing of an additional cash payment, equalization or pooling of fractional shares,
cash payment instead of delivery of shares, delivery of existing shares instead of issue of new shares, and the warrant
or conversion period.
Repurchase of Own Shares; Treasury Shares
Our shareholders’ meeting resolved on May 26, 2010 to authorize our management board as follows:
(a) Pursuant to section 71, para. 1, no. 8, of the German Stock Corporation Act, the company will be authorized to
acquire through May 25, 2015, up to 10% of the company’s share capital existing at the time of the resolution
by the annual general meeting or — if this value is lower — at the time the authorization is exercised. The
authorization can be used in whole or in installments, once or several times, by the company, by companies of
the Klöckner & Co Group or by third parties for the account of the company or companies of the Klöckner &
Co Group. The authorization may be used for any legally permissible purpose. Trading with the company’s
own stock is not permitted. Depending on the management board’s preference, such acquisitions will be
effected either on the stock exchange or by means of a public purchase offer directed at all shareholders.
(b) The equivalent value of each share to be acquired (excluding transaction costs) may where the share is
purchased on the stock exchange not exceed or fall below the price fixed on the trading day during the opening
auction of the company’s shares with the same features in Xetra trading (or a comparable successor system) on
the Frankfurt Stock Exchange by more than 10%.
(c) If shares are acquired by means of a public purchase offer, the company can either publish a formal offer or
publicly call for the submission of offers. In both cases, the company will set a purchase price or a purchaseprice
range per share. In the latter case, the final price will be determined from the available declarations of
acceptance respectively sale offers. The offer respectively the call for submission of offers can include a time
limit applying to acceptances respectively offers, conditions and the option of modifying a possible purchaseprice
range during the time period covering acceptances respectively sale offers if significant price swings
occur during this period. The purchase price per company share (excluding transaction costs) may not exceed
or fall below the stock-market price by more than 10%. If the company makes a formal public offer, the
applicable stock-market price will be the average closing price of the company’s stock with the same features
in Xetra trading (or a comparable successor system) on the Frankfurt Stock Exchange in the five trading days
that preceded the final decision by the management board regarding the formal offer or, should the offer be
adjusted, that preceded the final decision by the management board regarding the offer adjustment. In the event
that a call to submit sale offers is issued, the day on which the company accepted the sale offers will be
substituted by the day on which the management board made a decision about the offer respectively the
adjustment of the offer.
(d) Should the volume of tendered shares exceed the expected repurchase volume, the acquisition must be carried
out on the basis of the proportion of the tendered respectively offered shares. A preferential acquisition of
fewer than 100 shares of tendered respectively offered stock per shareholder as well as the rounding according
to business principles can be stipulated.
The management board will be authorized to sell the company’s own shares on the stock exchange or through a
public offer directed at all shareholders. For sales on the stock exchange, shareholders’ subscription rights will
be excluded. In the event of a sale through a public offer, the management board will be authorized to exclude
shareholders’ subscription rights for fractional amounts of shares. The management board will also be
authorized to sell the company’s own shares in a different manner if the company’s shares are sold for cash at a
price (excluding transaction costs) that is not significantly below the stock-market price of the company’s
stock at the time of the sale. This authorization (including other authorizations governing the issue of new
shares and authorizations to issue warrant-linked and/or convertible bonds that exclude subscription rights
pursuant to section 186, para. 3, sentence 4, of the German Stock Corporation Act and are exercised during the
period of this authorization until the date when it is exercised) will be limited to a total of 10% of the share
capital that existed at the time that the resolution was made by the annual general meeting or, should this be
less, of the company’s share capital that existed at the time the sale authorization was exercised. The
management board will further be authorized to sell the company’s acquired shares to third parties, with the
exclusion of the shareholders’ subscription rights, if this is carried out for the purpose of acquiring companies,
stakes in companies and/ or making investments in companies or servicing warrantlinked and/or convertible
bonds.
The management board will also be authorized, in the event of an offer to all shareholders, to grant to holders of
warrantlinked and/or convertible bonds issued by the company or a group company subscription rights to the
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quantity of shares to which they would have been entitled had they exercised their warrants respectively
conversion rights or fulfilled their conversion obligations.
(e) Finally, the management board will be authorized to cancel the acquired shares of the company without any
further decision by the annual general meeting being necessary.
The preceding authorizations can be used once or several times, in whole or in parts, individually or separately
by the company or by companies affiliated with it or by third parties for the account of the company or companies
affiliated with it.
As of the date of this prospectus, the Company does not hold any treasury shares within the meaning of
Section 71, para. 1, sent. 1, no. 2 of the German Stock Corporation Act.
Management and Employee Participation Plans
For our virtual stock option program relating to our management board members see “Management —
Management Board — Remuneration of management board members”.
Listing
Our shares have been admitted to the regulated market (regulierter Markt) of the Frankfurt am Main Stock
Exchange, and to the sub-segment with additional post-admission obligations (Prime Standard) of the Frankfurt
Stock Exchange.
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TAXATION IN THE FEDERAL REPUBLIC OF GERMANY
This section contains a brief summary of some important German tax principles, which are or may be relevant
to the acquisition, holding and transfer of shares and subscription rights. This description does not purport to be a
comprehensive or exhaustive description of all aspects of taxation potentially relevant to shareholders. This
summary is based on domestic German tax law applicable at the time of this prospectus, including the provisions of
double taxation treaties typically entered into between Germany and other countries. Tax regulations may change,
under certain circumstances even with retroactive effect. This section cannot replace individual tax advice for the
individual shareholder. Potential purchasers of shares and/or subscription rights are, therefore, advised to consult
with their tax advisors about the tax consequences of the acquisition, holding, and transfer of shares and
subscription rights, and the rules for obtaining a possible refund of German withholding tax paid (Kapitalertragsteuer).
Only such tax advisors can adequately take into account the special tax situation of the individual
shareholder.
Taxation of the Company
Corporate Income Tax
The profits of German companies are generally subject to corporate income tax. The corporate income tax rate
is uniformly 15% for both distributed and retained earnings plus a solidarity surcharge in the amount of 5.5% on the
corporate income tax liability (a total of 15.825%).
95% of any dividends received by the Company from domestic or foreign corporations are generally exempt
from corporate income tax, but 5% of the respective receipts are deemed to be non-deductible business expenses
and are, therefore, subject to corporate income tax (plus the solidarity surcharge). This also applies to profits of the
Company from the sale of shares in domestic or foreign corporations.
Trade Tax
In addition, German corporations are generally subject to trade tax (Gewerbesteuer) on trade income generated
from permanent establishments of a business in Germany. The amount of the trade tax depends on the rate of
assessment (Hebesatz) of the municipality in which a company maintains permanent establishments and may be
imposed at an effective rate of between 7% and 17.5%. The German companies of the Klöckner & Co Group are
currently subject to trade tax at an effective rate of approximately 15%. For corporate income tax purposes trade tax
is not deductible as business expense. Dividends as well as profits from the sale of shares held in another corporation
are generally treated, for purposes of trade tax, in the same manner as for purposes of corporate income tax.
However, dividends derived from domestic or foreign corporations are generally effectively exempt from trade tax
at an amount of 95% only if the company held a permanent participation at or, in case of dividends derived from a
foreign corporation, since the beginning of the relevant tax period of at least 15% in the share capital of the company
distributing the profit (trade tax participation exemption privilege). In case of a participation in a corporation within
the meaning of Art. 2 of the so-called EU parent subsidiary directive (Council Directive no. 90/435/EEC of July 23,
1990) domiciled in another Member State of the European Union, the trade tax participation exemption privilege is
already applicable for a 10% participation held at the beginning of the relevant tax period. Additional restrictions
apply to dividends derived from foreign corporations not being resident in the European Union. If the trade tax
participation exemption privilege is not available, the full dividend is subject to trade tax.
Tax losses
Subject to certain restrictions, current year tax losses can be used to offset current year tax gains. Remaining
tax losses up to an amount of EUR 511,500 may (optionally) be carried back one year for corporate income tax but
not for trade tax purposes. Tax losses which are not utilized by means of a loss carry-back may generally be carried
forward for an unlimited time period (subject to certain change-of-control rules pursuant to which loss carryforwards
may partially or fully forfeit, see below) and may be used to offset taxable income for corporate income
tax and trade tax purposes, limited, however, to an amount of EUR 1 million. To the extent that the taxable income
exceeds this threshold, only 60% of the exceeding amount can be offset by tax loss carry-forwards. The remaining
40% of the taxable income are in any case subject to tax (minimum taxation) (Mindestbesteuerung).
Interest limitation rules
According to the so-called interest barrier rule (Zinsschranke), the deductibility of interest expenses exceeding
the Company’s interest income is limited to 30% of the Company’s EBITDA as determined for tax purposes unless a
relevant exception from such interest barrier rules applies. Interest items that are not deductible under the interest
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arrier rule may be carried forward to subsequent years and may be deducted subject to the limitations set out above.
EBITDA amounts that could not be utilized in a financial year may be carried forward into future financial years;
however, the carry-forward period is limited to five years. Further limitations may apply to interest paid on
shareholder loans or on loans granted by a related party.
Loss of tax loss carry-forwards and interest carry forwards
Unutilized losses and interest carry forwards are forfeited in full if within a period of five years more than 50%
of the Company’s registered share capital or voting rights are directly or indirectly transferred, to an acquiring party,
affiliated individuals/entities or a group of acquirers with aligned interests, or a comparable change of ownership in
the Company occurs (harmful acquisition) (schädlicher Beteiligungserwerb). In addition, any losses and disallowed
interest incurred in the current tax year until the acquisition takes place would also be disallowed to offset profits
generated after the transfer took place. If 50% or less but more than 25% of the Company’s registered share capital
or voting rights are transferred or due to another harmful acquisition as described above, unutilized losses and
interest carry-forwards will forfeit pro rata to the transferred percentage. As of 2010, the above-described
limitations may not apply if the registered share capital or voting rights are transferred to certain transferees
belonging to the group as further defined in the pertinent provisions of which the Company forms part
(Konzernklausel) or to the extent that the losses do not exceed the built-in gains which are taxable in Germany
(Verschonungsregelung). It is currently unclear whether the limitations applying to loss and interest carry-forwards
also apply to EBITDA carry-forwards (if any).
Taxation of Shareholders
Shareholders may be subject to personal or corporate income tax and trade tax with their dividend income and
capital gains from sales of shares (or subscription rights). They may also be subject to inheritance tax and gift tax in
the case of a transfer of shares upon death or by way of a gift.
Income and Trade Tax
The taxation of dividends and of capital gains from the sale of shares (or subscription rights) may differ
between shareholders who are residents of Germany for tax purposes (see below section (1)) and shareholders who
are not (see section (2)). Also, the taxation depends on whether or not the shares form part of a business property of
the shareholder (i.e., are held as business assets or as non-business assets) — see below subsections (a) and (b) of
each section (1) and (2).
Persons (individuals or corporations) whose permanent residence, habitual abode, statutory seat or effective
place of management is located in Germany (“Tax-Residents”) are generally subject to unlimited (personal or
corporate) income taxation in Germany.
(1) (a) Shareholders who are Tax-Residents and who hold the shares as non-business assets
(i) Taxation of dividends and capital gains in general
Dividends and capital gains from sales of shares (and of subscription rights) received by individuals both
constitute taxable private investment income (“Private Investment Income”) if the shares do not form part of a
business property. Private Investment Income is generally subject to a flat taxation at a rate of 25% plus 5.5%
solidarity surcharge thereon resulting in an aggregate tax rate of 26.375% (and church tax, if applicable). The tax
base of such income will be the relevant gross income. Expenses related to Private Investment Income such as
financing or administration costs actually incurred in relation with the acquisition or ownership of the shares will
not be deductible. Instead, the total Private Investment Income will be decreased by a lump sum deduction of
EUR 801 (EUR 1,602 for married couples filing jointly).
The income tax liability of the individual will generally be satisfied by way of withholding. In this case, the
shareholder is not obliged to record the relevant income in his annual tax return. The Private Investment Income is
generally subject to a withholding tax in the amount of 25% plus a solidarity surcharge of 5.5% thereon (i.e., a total
of 26.375%) of the relevant gross income (e.g., in the case of dividends, the dividend resolved by the general
shareholders’ meeting). In the case of dividends, the Company must withhold the tax and remit the amount to the
competent tax authority for the account of the shareholder; in the case of capital gains, if the sales proceeds, e.g. the
investment income, are disbursed or credited by a German bank (including a German branch of a foreign bank), a
German financial services institution (including a German branch of a foreign financial services institution), a
German securities trading enterprise or a German securities trading bank which deposits or administers the shares (a
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“Domestic Paying Agent”), the Domestic Paying Agent must withhold and remit the tax for the shareholder’s
account.
Pursuant to the Government draft bill on the implementation of the directive 2009/65/EC on the coordination
of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable
securities (UCITS) of December 15, 2010 (OGAW-IV-Umsetzungsgesetz), the withholding tax on dividends shall no
longer be withheld by the Company if either the shares are admitted to collective safekeeping by a bank for central
depository and are entrusted to it for collective safekeeping in Germany, or if the shares are held in separate safe
custody (holding customers’ securities on special deposit; Streifbandverwahrung). Rather, the withholding tax shall
be deducted by the German bank, the German financial services institution, the German securities trading enterprise
or the German securities trading bank (including German branches of foreign institutions) which deposits or
administers the shares and disburses or credits the dividends or which disburses the dividends to a foreign body, or
by the bank for central depository of securities to which the shares are entrusted for collective safekeeping of
securities, if it disburses the dividends to a foreign body. The new regulation would be applicable for dividends that
are received by a shareholder after December 31, 2011. Currently it is not clear whether and to which extent the
proposed statutory provisions will become effective.
Upon application of shareholders who are subject to church tax under the applicable regional church tax law
(Landeskirchensteuergesetz) and who hold their shares as non-business assets church tax on their investment
income will be withheld and remitted by a Domestic Paying Agent. In this case the church tax withheld by a
Domestic Paying Agent will be final. The withheld church tax is not deductible as a special expense (Sonderausgabe)
by assessment. However, the Domestic Paying Agent can decrease the flat tax (solidarity surcharge
included) by 26.375% of the church tax which has to be deducted from the dividends. If church tax is not withheld
by a Domestic Paying Agent, shareholders who are subject to church tax are committed to report the dividends in
their income tax return. In this case, the church tax is imposed by assessment.
The shareholder can request that his Private Investment Income be taxed at ordinary tax rates instead of the flat
tax rate if this leads to a lower tax burden for the taxpayer. In this case, the withholding tax will be credited against
the shareholder’s income tax liability (arising upon assessment) and any excess withholding tax will be reimbursed.
(ii) Taxation of capital gains in particular
Capital gains from sales of shares do not constitute Private Investment Income and are not subject to
withholding tax if the shares have been acquired before 1 January 2009 (“Previously Acquired Shares”) because the
one-year period of sec. 23(1) sentence 1 no. 2 German Income Tax Act has expired.. If the shareholder acquired
shares of the Company before and on or after 1 January 2009 and such shares have been held in the same deposit, it
should be deemed that those shares that had been acquired first will be sold first.
Capital gains from the sale of shares which were acquired after December 31, 2008 and which an individual
shareholder holds as non-business assets are generally subject to a 25% flat tax (plus 5.5% solidarity surcharge
thereon, resulting in an aggregate withholding tax rate of 26.375% plus church tax, if applicable). The flat tax (plus
solidarity surcharge) is withheld irrespective of any holding period (for reasons of church tax please see above).
Losses from the sale of such shares can only be used to offset capital gains from the disposal of shares in stock
corporations during the same year or in subsequent years.
If the shares are deposited with or administered by a Domestic Paying Agent, the tax on the capital gains is
generally settled by way of withholding through the Domestic Paying Agent which is required to deduct a
withholding tax of 26.375% (including solidarity surcharge and upon application church tax thereon) of the capital
gains from the sale proceeds and remit it to the tax authority. In which case, however, the tax withheld, in principle,
would be creditable against the income tax liability of the shareholder (or refundable in case of an overpayment).
Regardless whether shares have been acquired before or on or after 1 January 2009 and irrespective of any
holding period, any capital gains from their sale remain outside the ambit of the tax regime applying on Private
Investment Income if the shareholder (or, in the case of a gratuitous acquisition of the shares, the shareholder’s
predecessor or predecessors) holds or has held a participation of a least 1% in the share capital of the Company in
the last five years prior to the sale (“Qualified Participation”). In this case, 60% of the relevant capital gains will be
subject to personal income tax (and the solidarity surcharge and church tax, if applicable) at the applicable rate and
the flat tax for Private Investment Income is not applicable. Conversely, 60% of capital losses from the sale of shares
are generally recognized for tax purposes.
The above principles of the taxation of capital gains from sales of shares should apply accordingly to capital
gains from sales of subscription rights.
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The exercise of subscription rights may not be considered a sale of such subscription rights (Statement of the
Federal Ministry of Finance, dated December 22, 2009, file no.: IV C 1 — S-2252/08/10004, marginal note 110).
For purposes of determining the capital gain from a sale of a subscription right that the shareholder has been
granted by the Company, it will be deemed that the acquisition costs of such subscription right have been zero EUR
if the capital gain constitutes Private Investment Income, unless the shareholder holds a Qualified Participation. In
the case of a Qualified Participation, acquisition costs for subscription rights are determined by the entity approach
(Gesamtwertmethode), which takes into account that the acquisition of subscription rights can be traced back to the
acquisition of the old shares. Therefore the offer of subscription rights causes part of the original acquisition cost of
the old shares to be split off, i.e. the acquisition cost of the old shares is reduced by the amount which is attributable
to the amount split off to the subscription rights. Also in the case of a Qualified Participation, the exercise of
subscription rights may not be considered a sale of such subscription rights (see Regional Tax Office of Hannover,
dated January 5, 2007, file no.: S 2244 81-StO 243).
Due to these legal uncertainties regarding the tax treatment of subscription rights, investors should consult with
their tax advisors.
(1) (b) Shareholders who are Tax-Residents and who hold the shares as business assets
If the shares form part of a business property, the taxation of the dividends and capital gains from sales of such
shares (and subscription rights) depends on whether the shareholder is a corporation, an individual or a partnership,
as described below. In case of dividends, the Company will deduct withholding tax in an amount of 25% plus a
solidarity surcharge of 5.5% thereon (i.e., a total of 26.375%) and remit the amount to the competent tax authority
for the account of the shareholder. Generally, no withholding tax has to be withheld from capital gains derived by
corporations whose statutory seat or effective place of management is in Germany or upon application of the
shareholder if the capital gains form part of the business income of a business property maintained in Germany. Any
tax withheld, in principle, is creditable against the income tax liability of the shareholder (or refundable in case of an
overpayment).
Corporations. If the shareholder is a corporation, 95% of the dividends and capital gains are generally
exempt from corporate income tax and the solidarity surcharge. Exceptions apply for enterprises in the
financial and insurance sector (see below). No minimum level of participation or minimum holding period
need be observed. 5% of the dividends and capital gains are deemed to be non-deductible expenses, and are,
therefore, subject to corporate income tax (plus solidarity surcharge), resulting in an aggregate tax rate of
15.825%. Aside from this, business expenses actually incurred in connection with the shares may in principle
be fully deducted while losses on a sale and depreciations on the shares can, as a general rule, not be deducted
as business expenses.
For trade tax purposes, the above exemption regime applies likewise. Dividends, however, are subject to trade
tax in the full amount, unless the corporation has a participation of at least 15% in the share capital of the
company at the beginning of the relevant tax period (trade tax participation exemption privilege). In this latter
case, the dividends are not subject to trade tax; however, trade tax is levied on the amount, which is deemed to
be non-deductible business expenses (in the amount of 5% of the dividend).
Individuals. If the shares form part of the business property of an individual, only 60% of the dividends and
capital gains are subject to German personal income tax (plus solidarity surcharge and church tax, if
applicable) at the relevant applicable rate. Accordingly, only 60% of the business expenses, which are
economically connected to the dividends or the sales, and of any losses on sales, are deductible for tax
purposes.
If the shares belong to a German permanent establishment of a business operation of the shareholder, the
dividends and capital gains are also subject to trade tax. In the case of capital gains, the above 60% taxation
applies accordingly. Dividends, however, are subject to trade tax in the full amount, unless the shareholder had
a participation of at least 15% in the share capital of the company at the beginning of the relevant tax period
(trade tax participation exemption privilege). The trade tax may generally (completely or partially) be credited
against the personal income tax liability of the shareholder in accordance with a lump-sum tax credit method,
depending on the tax rate imposed by the local municipality and certain individual circumstances. If the trade
tax participation exemption privilege applies, no trade tax will be due on the dividends.
Partnerships. If the shareholder is a partnership, the personal income tax or corporate income tax (and the
solidarity surcharge) is not charged at the level of the partnership, but at the level of the respective partner. The
taxation of each partner depends on whether the partner is a corporation or an individual. If the partner is a
corporation, the taxation of the dividends and capital gains will be in accordance with the principles described
144

above under “Corporations”. If the partner is an individual, the regime applying on “Individuals” described in
the preceding paragraph will apply accordingly. If a partnership retains profits, partners who are individuals
may receive a reduction of their personal income tax rate upon request and further provisions.
Regarding trade tax the following applies: Trade tax is generally imposed on 100% of the dividends received.
However, if the partnership has a participation of at least 15% in the share capital of the company at the
beginning of the relevant tax period, the dividends will generally not be subject to trade tax (trade tax
participation exemption privilege). As an exception to this general rule, 5% of the dividends received will be
considered non-deductible business expenses and, thus, be subject to trade tax to the extent that corporations
have a participation in the partnership. 60% of the profits from the sale of shares are subject to trade tax at the
level of the partnership to the extent that individuals are partners of the partnership, and only 5% of the profits
are taken into account to the extent that a corporation is a partner. Capital losses or other reductions in profit in
connection with the shares sold are not taken into account for purposes of trade tax to the extent they are
attributable to a partner that is a corporation, and subject to general restrictions only 60% of these losses or
expenses are taken into account to the extent they are attributable to a partner who is an individual. If the
shareholder is an individual, the trade tax paid by the partnership and attributable to his share is generally
(completely or partially) credited against the shareholder’s personal income tax in accordance with a lumpsum
tax credit method, depending on the tax rate imposed by the local municipality and certain personal
circumstances.
Sale and exercise of subscription rights. The acquisition costs for subscription rights held as business assets
are determined by the entity approach (Gesamtwertmethode, see above). Any profits from the sale of
subscription rights derived by a corporation are fully subject to income taxation and trade tax (Federal
Fiscal Court, January 23, 2008, file no. I R 101/06). However, 40% of profits from the sale of subscription
rights by individuals or partnerships, to the extent that individuals are partners of the partnership, should be tax
exempt from income and trade tax if the shares form business property (Federal Fiscal Court, October 27,
2005, file no. IX R 15/05). The exercise of subscription rights may generally be considered a non-taxable
event.
In each of the above cases, the tax base will generally be the relevant net income. A lump sum deduction will
not be available (as in the case of Private Investment Income). Also, the withholding tax and solidarity surcharge on
the dividend receipts will be credited as prepayments against the personal or corporate income tax and the solidarity
surcharge liability of the shareholder. Excess amounts withheld will entitle the shareholder to a refund, based on an
assessment to tax.
A less beneficial tax regime may apply under certain circumstances to dividends and capital gains realized by
companies that qualify as a financial institution, financial service provider, financial enterprise, life and health
insurance company or a pension fund (see below).
(2) (a) Shareholders who are not Tax-Residents and whose shares do not form part of a business property
located in Germany
Dividends received by shareholders who are not Tax-Residents and whose shares do not qualify as business
property of a permanent establishment or fixed base located in Germany will generally be subject to a withholding
tax of 25% plus a solidarity surcharge as described above. The German tax liability is satisfied with such
withholding tax, which may be reduced under certain circumstances as described below.
Unlike dividends, capital gains realized by non Tax-Residents (whose shares do not qualify as business
property of a permanent establishment or fixed base located in Germany) will generally only be subject to income
tax if the selling shareholder holds a Qualified Participation (as defined above). In case of an individual shareholder,
in principle 60% of the capital gain are subject to personal income tax, this should apply accordingly to capital gains
from the sale of subscription rights by individuals. Whereas in case of corporate shareholder, generally only 5% of
the capital gain from the sale of shares and the full amount of capital gains from the sale of subscription rights are
subject to corporate income tax. In case of a Qualified Participation there is no obligation to deduct withholding tax
according to a decree issued by the German Federal Ministry of Finance (Bundesministerium der Finanzen) on
December 22, 2009, marginal note 315.
Special rules apply under double taxation treaties and the so-called EU parent subsidiary directive and for
corporations:
Dividends. Dividends may be exempt from tax or subject to a reduced tax rate under a double taxation treaty
or the EU parent subsidiary directive. Nevertheless, tax will generally be withheld even if the dividend income
is so exempt.
145

In the case of dividends distributed to a company within the meaning of Art. 2 of the so-called EU parent
subsidiary directive (Council Directive no. 90/435/EEC of July 23, 1990) domiciled in another Member State
of the European Union, an exemption from withholding tax will be granted upon request if other prerequisites
are satisfied (Freistellung im Steuerabzugsverfahren); alternatively, any tax withheld may be refunded if
certain requirements are met. This also applies to dividends distributed to a permanent establishment of such
parent company located in another Member State of the European Union or to a parent company that is a Tax-
Resident if the participation in the company actually forms part of the permanent establishment located in
another Member State. The key prerequisite for the application of the EU parent subsidiary directive is that the
shareholder has a direct participation in the Company of at least 10% for at least one year.
The withholding tax on distributions to other non-Tax-Residents is generally reduced in accordance with a
double taxation treaty if Germany has concluded such a treaty with the country of residence of the shareholder.
The reduction of the withholding tax is generally granted in such a manner that the difference between the
withheld total amount, including the solidarity surcharge, and the reduced tax rate under the double taxation
treaty (normally 15%) is reimbursed by the German tax administration upon request (Federal Central Office
for Taxes, main office in Bonn-Beuel, An der Küppe 1, D-53225 Bonn). The Federal Central Office for Taxes
(Bundeszentralamt für Steuern) may request that the foreign shareholder provides evidence that he satisfies
certain requirements (in particular so-called substance requirements) as a condition of such reimbursement.
Forms for the reimbursement process are available at the Federal Central Office for Taxes
(http://www.bzst.bund.de).
Corporate shareholders are under certain circumstances entitled to reclaim two fifths of the tax withheld. The
recipient’s entitlement to any further reimbursement under the EU parent-subsidiary directive or any double
taxation treaty remains unaffected thereof. Application forms for such reimbursement can be obtained from
the Federal Central Office for Taxes (at the above address). Again, the Federal Central Office for Taxes may
request from the shareholder evidence of the satisfaction of certain requirements.
Capital Gains. Most double taxation treaties provide for an exemption from German taxation in case of
capital gains and assign the right to tax to the country of residence of the shareholder.
(2) (b) Shareholders who are not Tax-Residents and whose shares form part of a business property
located in Germany
Dividends and capital gains relating to shares that form part of the business property of a permanent
establishment (or a fixed place of business) maintained in Germany or of a business for which a permanent
representative has been appointed in Germany, are subject to German income taxation and trade tax according to the
principles described in the above section (1) (b). Any withholding tax will be credited against the shareholder’s
income tax or corporate tax liability and reimbursed in the amount of any excess.
Special Regulations for Credit Institutions, Financial Services Institutions, Financial Enterprises as well
as Life Insurance and Health Insurance Companies and Pension Funds
To the extent that credit institutions and financial services institutions hold or sell shares, which are attributable
to their trading book pursuant to Section 1a of the German Banking Act (Gesetz über das Kreditwesen), dividend
income and capital gains (from the sale of shares or subscription rights) are generally subject in full to taxation at
ordinary tax rates. This, in principle, also applies to shares
which are acquired by financial enterprises within the meaning of the German Banking Act for the purpose of
realizing short-term trading profits for their own account, or
which are acquired by credit institutions, financial services institutions or financial enterprises with their
registered offices in another Member State of the European Community or in another country party to the EEA
Agreement, for the purpose of realizing short-term trading profits for their own account, or
which are attributable to the capital investments of life insurance and health insurance companies or pension
funds.
The provisions with regard to the effective 95% exemption from corporate income tax and, if applicable, from
any trade tax on dividends, however, are applicable in the instances mentioned in this section (special rules for
companies in the financial and insurance sector and for pension funds), to the extent that the dividends are given
beneficial tax treatment in the context of the so-called EU parent subsidiary directive (Council Directive no. 90/435/
EEC dated July 23, 1990).
146

Inheritance Tax and Gift Tax
The transfer of shares to another person upon death or by way of a gift is generally subject to German
inheritance tax or gift tax if:
(i) the decedent, the person making the gift, the heir, the person receiving the gift or another beneficiary
acquiring the shares at the time of the transfer of the assets has his residence or ordinary residence, place
of management or registered office in Germany or is a German citizen that has not permanently resided in
a foreign country for longer than five years without having a German residence, or
(ii) the shares belong to business assets of the decedent or the person making the gift for which a permanent
establishment was maintained in Germany or for which a permanent representative was appointed, or
(iii) the decedent or the person making the gift, either himself or together with other persons related to him,
had a direct or indirect participation of at least 10% in the share capital of the Company.
The few German double taxation treaties on inheritance tax and gift tax, which are presently in force, normally
provide that German inheritance tax or gift tax can only be charged in the case of (i) above and also with certain
restrictions in case of (ii). Special rules apply to certain German citizens living outside of Germany and former
German citizens.
Other Taxes
No German capital transfer taxes, value-added taxes, stamp taxes or similar taxes apply to the acquisition, sale
or other form of transferring shares or subscription rights. However, an entrepreneur can opt for the duty to pay
value-added tax on the sale of shares, which is generally exempt from value-added tax if the sale is made to another
entrepreneur for the entrepreneur’s business. Property tax (Vermögensteuer) is presently not charged in Germany.
147

TAXATION IN LUXEMBOURG
The following is a general description of certain Luxembourg tax considerations relating to the purchasing,
holding and disposing of the Shares. This description does not purport to be a complete analysis of all possible tax
situations that may be relevant to a decision to purchase the Shares. Prospective purchasers should consult their own
tax advisers as to the applicable tax consequences of the purchase and the ownership of the Shares, based on their
particular circumstances. No conclusions should be drawn with respect to issues not specifically addressed by this
description. This description is based on the laws, regulations and applicable tax treaties as in effect in Luxembourg
on the date hereof, all of which are subject to change, possibly with retroactive effect. It is not intended to be, nor
should it be construed to be, legal or tax advice. Prospective purchasers should therefore consult their own advisers
as to the effects of any local laws, including Luxembourg tax law, to which they may be subject.
The residence concept used under the respective headings below applies for Luxembourg income tax
assessment purposes only. Any reference in the present section to a tax, duty, levy, impost or other charge or
withholding of a similar nature refers to Luxembourg tax law and/or concepts only. Also, a reference to
Luxembourg income tax encompasses corporate income tax (impôt sur le revenu des collectivités), municipal
business tax (impôt commercial communal), solidarity surcharges (contributions au fonds pour l’emploi), as well as
personal income tax (impôt sur le revenu) generally. Investors may further be subject to net wealth tax (impôt sur la
fortune) as well as other duties, levies or taxes. Corporate income tax, municipal business tax as well as the
solidarity surcharge apply to most corporate taxpayers resident of Luxembourg for tax purposes. Individual tax
payers are generally subject to personal income tax and the solidarity surcharge. Under certain circumstances,
where an individual taxpayer acts in the course of the management of a professional or business undertaking,
municipal business tax may apply as well.
Taxation of Income Derived from and Capital Gains Realized on the Shares by Luxembourg Resident
Taxpayers
Individual holders of Shares
Dividends derived from the Shares by resident individuals, who act in the course of the management of either
their private wealth or their professional or business activity, are subject to income tax at the progressive ordinary
rate (with a top effective marginal rate of currently 39%, to which must be included a solidarity surcharge, the
amount of which depending on the total taxable income). Under current Luxembourg tax laws, 50% of the gross
amount of dividends may be exempt from Luxembourg income tax if the distributing company is an EU resident
company covered by article 2 of the EU Parent-Subsidiary Directive or is otherwise organized in the form of a
capital company (sociétés de capitaux) resident in a state having concluded a double tax treaty with Luxembourg
and which is fully liable to a tax which corresponds to Luxembourg corporate income tax, i.e., levied at a rate of at
least 10.5% on a taxable base which is similar to the Luxembourg corporate income tax base. In addition, a total
lump-sum of EUR 1,500 (which is doubled for taxpayers who are jointly taxable) is deductible from total dividend
received during the tax year.
Capital gains realized on the disposal of the Shares by resident individuals, who act in the course of the
management of their private wealth, are not subject to income tax, unless said capital gains qualify either as
speculative gains or as gains on a substantial participation. A disposal may include a sale, an exchange, a
contribution or any other kind of alienation of the Shares. Capital gains are deemed to be speculative if the Shares
are disposed within 6 months after their acquisition or if their disposal precedes their acquisition. Speculative gains
realized during the year that are equal to, or are greater than, EUR 500 are subject to income tax at ordinary rates. A
participation is deemed to be substantial where a resident individual holder of Shares holds, either alone or together
with his spouse, his partner and/or minor children, directly or indirectly, at any time within the 5 years preceding the
disposal, more than 10% of share capital of the Company. A holder of Shares is also deemed to alienate a substantial
participation if he acquired free of charge, within the 5 years preceding the transfer, a participation that was
constituting a substantial participation in the hands of the alienator (or the alienators in case of successive transfers
free of charge within the same 5-year period). Capital gains realized on a substantial participation more than
6 months after the acquisition thereof may benefit from an allowance of up to EUR 50,000 granted for a ten-year
period (which is doubled for taxpayers who are jointly taxable). They are subject to income tax according to the
half- global rate method, (i.e., the average rate applicable to total income is calculated according to progressive
income tax rates and half of the average rate is applied to the capital gains realized on the substantial participation
unless the gains are of a speculative nature).
Capital gains realized on the disposal of the Shares by resident individual holders of Shares, who act in the
course of their professional or business activity, are subject to income tax at ordinary rates.
148

Luxembourg resident corporate holders of Shares
Dividends derived from the Shares by a Luxembourg fully-taxable resident company are subject to income tax,
unless the conditions of the Luxembourg participation exemption regime, as described below, are satisfied. Under
current Luxembourg tax laws, 50% of the gross amount of dividends may be exempt from Luxembourg income tax
if the distributing company is an EU resident company covered by article 2 of the EU Parent-Subsidiary Directive or
is otherwise organised in the form of a capital company (sociétés de capitaux) resident in a state having concluded a
double tax treaty with Luxembourg and which is fully liable to a tax which corresponds to Luxembourg corporate
income tax.
Under the Luxembourg participation exemption regime, dividends derived from the Shares by a fully-taxable
Luxembourg collective entity (organisme à caractère collectif) may be exempt from income tax if, cumulatively,
(i) it has held or commits itself to hold the Shares for an uninterrupted period of at least 12 months, (ii) during this
uninterrupted period of 12 months the Shares represent a participation of a least 10% in the share capital of the
Company or the Shares were acquired for at least EUR 1.2 million, (iii) the dividend is put at the disposal within
such period and (iv) the Company is a collective entity (organisme à caractère collectif) meeting the conditions set
out in Article 2 of the EU Parent-Subsidiary Directive or a non-resident capital company (société de capitaux) liable
to a tax comparable to the Luxembourg corporate income tax. Liquidation proceeds are, under Luxembourg
domestic law, assimilated to a received dividend and may be exempt under the same conditions. Shares held through
a fiscally transparent entity are considered as being a direct participation proportionally to the percentage held in the
net assets of the transparent entity.
Capital gains realized by a Luxembourg fully-taxable collective entity (organisme à caractère collectif) on the
Shares are subject to income tax at ordinary rates, unless the conditions of the participation exemption regime, as
described below, are satisfied.
Under the Luxembourg participation exemption regime, capital gains realized on the Shares by a Luxembourg
fully-taxable collective entity (organisme à caractère collectif) may be exempt from income tax if, cumulatively,
(i) it has held or commits itself to hold the Shares for an uninterrupted period of at least 12 months, (ii) during this
uninterrupted period of 12 months the Shares represent a participation of a least 10% in the share capital of the
Company or the Shares were acquired for at least EUR 6 million and (iii) the Company is a collective entity
(organisme à caractère collectif) meeting the conditions set out in Article 2 of the EU Parent-Subsidiary Directive
or a non-resident capital company (société de capitaux) liable to a tax comparable to the Luxembourg corporate
income tax. Shares held through a fiscally transparent entity are considered as being a direct participation
proportionally to the percentage held in the net assets of the transparent entity.
Luxembourg resident Companies benefiting from a Special Tax Regime
Holders of Shares who are (i) undertakings for collective investment subject to the law of December 20, 2002
(as amended) relating to undertakings for collective investment or (ii) specialized investment funds subject to the
law of February 13, 2007 relating to specialized investment funds or (iii) private asset holding companies governed
by the law of May 11, 2007 introducing a private family assets holding company are exempt from income tax in
Luxembourg. Dividends derived from and capital gains realized on the Shares are thus not subject to income tax in
their hands.
Dividends derived from and capital gains realized on the Shares by holders of Shares who are securitization
companies subject to the law of March 22, 2004 on securitization are subject to income tax at ordinary rates but all
the obligations assumed by securitization companies vis-à-vis investors and creditors (e.g. dividends, interest, etc.)
are deductible for tax purposes. Income received by securitization vehicles in relation with the Shares may therefore
be neutralized and thus be non-taxable in Luxembourg.
Dividends derived from and capital gains realized on the Shares by holders of Shares who are companies
subject to the law of June 15, 2004 (as amended) on venture capital vehicles (“SICAR Law”) are exempt from
corporate income tax to the extent such dividends and capital gains are deemed to be qualifying income within the
meaning of the SICAR Law.
Taxation of Income Derived from and Capital Gains Realized on the Shares by Luxembourg Non-Resident
Taxpayers
Holders of shares who are non-residents of Luxembourg, and who do not have a permanent establishment, a
permanent representative or a fixed place of business in Luxembourg to which the Shares are attributable are not
subject to any Luxembourg income tax, whether they receive payments of dividends or realize capital gains upon
sale of Shares except for capital gains realized on a substantial participation (see above) before the acquisition or
149

within the first 6 months of the acquisition thereof that may be subject to income tax in Luxembourg (subject to the
double tax treaties).
Dividends derived from the Shares by non-residents of Luxembourg having a permanent establishment, a
permanent representative or a fixed place of business in Luxembourg to which the Shares are attributable are subject
to income tax, unless the conditions of the Luxembourg participation exemption regime, as described below, are
satisfied. Under current Luxembourg tax laws, 50% of the gross amount of dividends may be exempt from
Luxembourg income tax if the distributing company is an EU resident company covered by article 2 of the EU
Parent-Subsidiary Directive or is otherwise organised in the form of a capital company (sociétés de capitaux)
resident in a state having concluded a double tax treaty with Luxembourg and which is fully liable to a tax which
corresponds to Luxembourg corporate income tax.
Under the Luxembourg participation exemption regime, dividends derived from the Shares by a Luxembourg
permanent establishment of (i) a collective entity (organisme à caractère collectif) meeting the conditions set out in
Article 2 of the EU Parent-Subsidiary Directive, (ii) a capital company (société de capitaux) which is a resident in a
state having concluded a double tax treaty with Luxembourg or (iii) of a capital company (société de capitaux)ora
cooperative company which is resident in a state other than a member state of the European Union but which is part
of the European Economic Area Agreement, may be exempt from income tax if, cumulatively, (i) it has held or
commits itself to hold the Shares for an uninterrupted period of at least 12 months, (ii) during this uninterrupted
period of 12 months the Shares represent a participation of a least 10% in the share capital of the Company or the
Shares were acquired for at least EUR 1.2 million, (iii) the dividend is put at the disposal within such period and
(iv) the Company is a collective entity (organisme à caractère collectif) meeting the conditions set out in Article 2
of the EU Parent-Subsidiary Directive or a non-resident capital company (société de capitaux) liable to a tax
comparable to the Luxembourg corporate income tax. Liquidation proceeds are, under Luxembourg domestic law,
assimilated to a received dividend and may be exempt under the same conditions.
Capital gains realized by non-residents of Luxembourg having a permanent establishment, a permanent
representative or a fixed place of business in Luxembourg on the Shares are subject to income tax at ordinary rates,
unless the conditions of the participation exemption regime, as described below, are satisfied.
Under the Luxembourg participation exemption regime, capital gains realized by a Luxembourg permanent
establishment of (i) a collective entity (organisme à caractère collectif) meeting the conditions set out in Article 2 of
the EU Parent-Subsidiary Directive or (ii) a capital company (société de capitaux) which is a resident in a state
having concluded a double tax treaty with Luxembourg or (iii) of a capital company (société de capitaux) ora
cooperative company but which is resident in a state other than a member state of the European Union which is part
of the European Economic Area Agreement on the Shares may be exempt from income tax if, cumulatively, (i) it has
held or commits itself to hold the Shares for an uninterrupted period of at least 12 months, (ii) during this
uninterrupted period of 12 months the Shares represent a participation of a least 10% in the share capital of the
Company or the Shares were acquired for at least EUR 6 million and (iii) the Company is a collective entity
(organisme à caractère collectif) meeting the conditions set out in Article 2 of the EU Parent-Subsidiary Directive
or a non-resident capital company (société de capitaux) liable to a tax comparable to the Luxembourg corporate
income tax.
Other Taxes
Net Wealth Tax
Luxembourg net wealth tax will not be levied on a holder of Shares unless (i) such holder is a corporate entity
resident in Luxembourg other than an undertaking for collective investment governed by the law of December 20,
2002 (as amended) relating to undertakings for collective investment, a securitization vehicle governed by the law
of March 22, 2004 on securitization, an entity subject to the law of June 15, 2004 on venture capital vehicles (as
amended), a specialized investment fund governed by the law of February 13, 2007 relating to specialized
investment funds or a private asset holding company governed by the law of May 11, 2007 introducing a private
family assets holding company, or (ii) the Shares are attributable to an enterprise or part thereof which is carried on
through a permanent establishment, a permanent representative or a fixed place of business in Luxembourg of a
capital company (société de capitaux) to which the Shares are attributable, where in case of a permanent
establishment, the conditions of the participation exemption applicable to dividends (as described above) are
not fulfilled (except that no holding period is required).
Except with regard to Shares benefiting from the participation exemption, Shares held by a Luxembourg fullytaxable
resident collective entity (organisme à caractère collectif) are subject to Luxembourg net wealth tax.
150

Registration Taxes and Stamp Duties
Neither the issuance of the Shares, nor the disposal of the Shares is subject to Luxembourg registration tax or
stamp duty.
Inheritance and gift tax
Under Luxembourg tax law, where an individual shareholder is a resident of Luxembourg for inheritance tax
purposes at the time of his/her death, the Shares are included in his or her taxable basis for inheritance tax purposes.
Gift tax may be due on a gift or donation of Shares, if embodied in a Luxembourg deed or otherwise registered in
Luxembourg.
Withholding tax
Dividends distributed by the Company to the shareholders are not subject to any withholding tax in
Luxembourg even if paid through a Luxembourg-based paying agent.
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Financial Information
Unaudited consolidated financial statements of Klöckner & Co SE as of and for the three
months ended March 31, 2011 (IFRS) ............................................. F-2
Consolidated statement of income ................................................... F-3
Statement of comprehensive income .................................................. F-4
Consolidated statement of financial position ............................................ F-5
Consolidated statement of cash flows ................................................. F-6
Summary of changes in equity ...................................................... F-7
Selected explanatory notes ......................................................... F-8
Review Report .................................................................. F-12
Audited consolidated financial statements of Klöckner & Co SE as of and for the financial year
ended December 31, 2010 (IFRS) ................................................. F-13
Consolidated statement of income ................................................... F-14
Statement of comprehensive income .................................................. F-15
Consolidated statement of financial position ............................................ F-16
Consolidated statement of cash flows ................................................. F-17
Summary of changes in equity ...................................................... F-18
Notes to the consolidated financial statements. .......................................... F-19
Auditor’s Report ................................................................ F-68
Audited consolidated financial statements of Klöckner & Co SE as of and for the financial year
ended December 31, 2009 (IFRS) ................................................. F-69
Consolidated statement of income ................................................... F-70
Statement of comprehensive income .................................................. F-71
Consolidated statement of financial position ............................................ F-72
Consolidated statement of cash flows ................................................. F-73
Summary of changes in equity ...................................................... F-74
Notes to the consolidated financial statements. .......................................... F-75
Auditor’s Report ................................................................ F-123
Audited consolidated financial statements of Klöckner & Co SE as of and for the financial year
ended December 31, 2008 (IFRS) ................................................. F-124
Consolidated statement of income ................................................... F-125
Consolidated balance sheet. ........................................................ F-126
Consolidated statement of cash flows ................................................. F-127
Summary of changes in equity ...................................................... F-128
Notes to the consolidated financial statements. .......................................... F-129
Auditor’s Report ................................................................ F-175
Audited unconsolidated annual financial statements of Klöckner & Co SE as of and for financial
year ended December 31, 2010 (HGB) ............................................. F-176
Income statement ................................................................ F-177
Balance sheet .................................................................. F-178
Notes ........................................................................ F-180
Auditor’s Report ................................................................ F-187
F-1

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
KLÖCKNER & CO SE AS OF AND FOR THE THREE MONTHS
ENDED MARCH 31, 2011 (IFRS)
F-2

Consolidated statement of income for the three-month period ending March 31, 2011
(E thousand)
Sales ........................................................... 1,586,799 1,048,841
Other operating income. ............................................. 8,475 8,028
Change in inventory ................................................ 7,342 (698)
Own work capitalized ............................................... — 5
Cost of materials .................................................. (1,241,008) (812,538)
Personnel expenses ................................................. (131,520) (111,180)
Depreciation and amortization ......................................... (18,653) (18,393)
Other operating expenses ............................................ (125,589) (103,372)
Operating result .................................................. 85,846 10,693
Finance income ................................................... 2,332 2,057
Finance expenses .................................................. (21,682) (17,213)
Financial result ................................................... (19,350) (15,156)
Income before taxes ............................................... 66,496 (4,463)
Income taxes ..................................................... (22,350) 6,194
Net income ...................................................... 44,146 1,731
thereof attributable to
— shareholders of Klöckner & Co SE ................................. 43,462 1,166
— non-controlling interests ......................................... 684 565
Earnings per share
— basic ....................................................... 0.65 0.02
— diluted. ..................................................... 0.60 0.02
F-3
Q1
2011
Q1
2010

Statement of comprehensive income for the three-month period ending March 31, 2011
(E thousand)
Net income ..........................................................
Income/expenses directly recognized in equity
44,146 1,731
Foreign currency translation .............................................. (34,414) 31,963
Gain/loss from cash flow hedges ........................................... 19,269 (21,120)
Related income tax ..................................................... (1,337) 1,575
Other comprehensive income ............................................ (16,482) 12,418
Total comprehensive income ............................................. 27,664 14,149
thereof attributable to
— shareholders of Klöckner & Co SE ..................................... 27,001 13,674
— non-controlling interests ............................................. 663 475
F-4
Q1
2011
Q1
2010

Consolidated statement of financial position as of March 31, 2011
March 31, December 31,
2011
2010
(E thousand)
Assets
Non-current assets
Intangible assets .................................................. 210,797 227,323
Property, plant and equipment ........................................ 507,376 524,169
Investment property ................................................ 10,486 10,486
Financial assets ................................................... 2,778 2,721
Other assets ..................................................... 30,174 32,027
Deferred tax assets ................................................ 45,248 59,235
Total non-current assets ...........................................
Current assets
806,859 855,961
Inventories ...................................................... 1,043,235 898,841
Trade receivables. ................................................. 924,641 703,101
Income tax receivable .............................................. 14,687 34,251
Other assets ..................................................... 61,883 62,898
Liquid funds ..................................................... 927,931 934,955
Assets held for sale ................................................ 975 1,088
Total current assets ............................................... 2,973,352 2,635,134
Total assets .....................................................
Equity and Liabilities
Equity
3,780,211 3,491,095
Subscribed capital ................................................. 166,250 166,250
Capital reserves. .................................................. 464,243 464,243
Retained earnings ................................................. 639,624 596,162
Accumulated other comprehensive income ............................... 32,260 48,721
Equity attributable to shareholders of Klöckner & Co SE ................. 1,302,377 1,275,376
Non-controlling interests ............................................ 15,781 15,118
Total equity .....................................................
Non-current liabilities and provisions
1,318,158 1,290,494
Provisions for pensions and similar obligations. ........................... 173,486 174,442
Other provisions .................................................. 30,111 31,513
Financial liabilities ................................................ 1,097,112 1,020,582
Other liabilities ................................................... 34,691 54,945
Deferred tax liabilities .............................................. 71,348 79,910
Total non-current liabilities .........................................
Current liabilities
1,406,748 1,361,392
Other provisions .................................................. 101,928 107,259
Income tax liabilities ............................................... 23,787 31,638
Financial liabilities ................................................ 45,935 39,578
Trade payables ................................................... 804,704 584,614
Other liabilities ................................................... 78,951 76,120
Total current liabilities ............................................ 1,055,305 839,209
Total liabilities ................................................... 2,462,053 2,200,601
Total equity and liabilities .......................................... 3,780,211 3,491,095
F-5

Consolidated statement of cash flows for the three-month period ending March 31, 2011
(E thousand)
Income before taxes .................................................. 66,496 (4,463)
Financial result ...................................................... 19,350 15,156
Depreciation and amortization ........................................... 18,653 18,393
Other non-cash expenses ............................................... 265 361
Gain on disposal of non-current assets ..................................... (418) (465)
Operating cash flow ................................................. 104,346 28,982
Changes in provisions .................................................
Changes in other assets and liabilities
(8,404) (12,469)
Inventories ....................................................... (162,399) (110,559)
Trade receivables. .................................................. (234,831) (141,158)
Other receivables. .................................................. 9,659 43,422
Trade payables .................................................... 230,510 155,950
Other liabilities .................................................... (1,213) (25,598)
Income taxes paid .................................................... (7,038) 1,064
Cash flow from operating activities ..................................... (69,370) (60,366)
Proceeds from the sale of non-current assets and assets held for sale .............. 693 935
Payments for intangible assets, property, plant and equipment. ................... (6,011) (3,966)
Acquisition of subsidiaries. ............................................. — (124,282)
Cash flow from investing activities ...................................... (5,318) (127,313)
Borrowings ......................................................... 85,712 45,864
Repayment of financial liabilities. ........................................ (11,322) (11,424)
Repayment of BSS shareholder loans. ..................................... — (57,878)
Interest paid ........................................................ (6,352) (4,223)
Interest received ..................................................... 2,578 1,465
Cash flow from financing activities ...................................... 70,616 (26,196)
Changes in cash and cash equivalents .................................... (4,072) (213,875)
Effect of foreign exchange rates on cash and cash equivalents ................... (2,952) 1,917
Cash and cash equivalents at the beginning of the period ....................... 934,955 826,517
Cash and cash equivalents at the end of the period ......................... 927,931 614,559
F-6
Q1
2011
Q1
2010

Summary of changes in equity
Subscribed
capital
of Klöckner
&CoSE
Capital
reserves of
Klöckner
&CoSE
Retained
earnings
Accumulated other
comprehensive income
Currency
translation
adjustment
Fair value
adjustments
of financial
instruments
Equity
attributable
to shareholders
of Klöckner
&CoSE
Noncontrolling
interests Total
(E thousand)
Balance as of January 1, 2010 ......
Income/expenses directly recognized in
equity
166,250 429,493 518,621 10,994 (17,163) 1,108,195 15,068 1,123,263
Foreign currency translation . . . . . . . 32,053 32,053 (90) 31,963
Gain/loss from cash flow hedges . . . . (21,120) (21,120) (21,120)
Related income tax . . . . . . . . . . . . . (4,911) 6,486 1,575 1,575
Net income . . . . . . . . . . . . . . . . . . . . 1,166 1,166 565 1,731
Total comprehensive income ....... 13,674 475
Balance as of March 31, 2010 ...... 166,250 429,493 519,787 38,136 (31,797) 1,121,869 15,543 1,137,412
Balance as of January 1, 2011 ......
Income/expenses directly recognized in
equity
166,250 464,243 596,162 84,717 (35,996) 1,275,376 15,118 1,290,494
Foreign currency translation . . . . . . . (34,393) (34,393) (21) (34,414)
Gain/loss from cash flow hedges . . . . 19,269 19,269 19,269
Related income tax . . . . . . . . . . . . . 4,579 (5,916) (1,337) (1,337)
Net income . . . . . . . . . . . . . . . . . . . . 43,462 43,462 684 44,146
Total comprehensive income ....... 27,001 663
Balance as of March 31, 2011 ...... 166,250 464,243 639,624 54,903 (22,643) 1,302,377 15,781 1,318,158
F-7

Selected explanatory notes to the interim consolidated financial statements of Klöckner & Co SE
for the three-month period ending March 31, 2011
(1) Basis of presentation
The interim consolidated financial statements of Klöckner & Co SE for the three-month period ending
March 31, 2011 were prepared for the interim presentation in accordance with Sec. 37x para. 3 WpHG in connection
with Sec. 37w para. 2 WpHG as well as International Financial Reporting Standards (IFRS) and the respective
interpretations issued by the International Accounting Standards Board (IASB) as adopted for use within the EU.
The interim consolidated financial statements were reviewed by an independent auditor.
Except for the application of new standards as discussed below in Note 2, the accounting policies applied to the
interim financial statements are consistent with those used for the consolidated financial statements of Klöckner &
Co SE as of December 31, 2010 under consideration of the IAS 34 regulations (Interim Financial Reporting). A
detailed description of those policies is provided in the notes to the consolidated financial statements on pages 80 to
89 of the 2010 Annual Report.
As part of the preparation of an interim consolidated financial statement in accordance with the IAS 34
“Interim Financial Reporting” for the period ending March 31, 2011 requires Klöckner & Co SE’s Management
Board to make judgments, estimates and assumptions that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The actual amounts can differ from these estimates. In the current
interim consolidated financial statement no significant changes were made to such estimates compared to the period
ending December 31, 2010.
In the opinion of the Management Board, the interim consolidated financial statements reflect all adjustments
deemed necessary to provide a true and fair view of the results. Results for the period ending March 31, 2011 are not
necessarily indicative of future results.
The present interim consolidated financial statements for the three-month period ending March 31, 2011 were
authorized for issuance by the Management Board after discussion with the Audit Committee of the Supervisory
Board on May 10, 2011. Unless otherwise indicated, all amounts are stated in million Euros (A million).
Discrepancies to the unrounded figures may arise.
(2) New standards and interpretations
In the reporting period the Klöckner & Co-Group applied the following standards and interpretations for the
first time:
Standard/Interpretation
Annual Improvements 2010. ..........................................................
Amendment to IFRIC 14 Prepayments of a Minimum Funding Liability ..........................
IAS 24 (rev.) (Related Party Disclosures). ................................................
IFRIC 19 (Extinguishing Financial Liabilities with Equity Instruments) ..........................
The initial application of the revised standards and interpretations did not have an impact on the consolidated
financial statements.
(3) Share-based payment
In 2006 the Group has established share-based payment programs. Eligible for share-based payment are
Management Board members as well as certain members of the senior management. The Group’s programs are
cash-settled virtual stock option plans.
A total of 602,700 virtual stock options (December 31, 2010: 602,700) apply to the Management Board
programs as of March 31, 2011. In addition to the Management Board program 140,250 virtual stock options for
2011 (2010: 90,000) were granted to certain national and international members of the senior management during
the first quarter. The exercise conditions are fundamentally identical to the Klöckner & Co SE Management Board
programs VSO I and VSO III. The 2011 grants are subject to waiting periods over several years.
F-8

The total number of outstanding virtual stock options developed as follows:
(Number of virtual stock options)
Management
Board
programs
Other
executives Total
Outstanding at the beginning of the year ....................... 602,700 188,000 790,700
Granted ................................................. — 140,250 140,250
Exercised ................................................ — (10,000) (10,000)
Outstanding at the end of the reporting period .................. 602,700 318,250 920,950
therof vested ............................................ 60,000 66,000 126,000
During the first quarter of 2011 10,000 (2010: 13,000) virtual stock options were exercised. Payments for
share-based compensation amounted to A0.1 million (2010: A0.1 million). The pro rata provision for share-based
payments to the Management Board and senior management amounted to A3.4 million (Dezember 31, 2010:
A2.7 million) with a total of A0.8 million expense recognized (2010: A1.0 million).
To limit expenses and cash flows for the granted and approved grants of virtual stock options for the period
including the financial year 2011, the Group entered into certain derivative financial instruments. These instruments
(options) were accounted for at fair value through profit or loss in accordance with IAS 39 (Financial Instruments:
Recognition and Measurement). In the first quarter of 2011, the remaining outstanding options were settled at a
settlement gain of A0.2 million (2010: positive fair value changes of hedging instruments amounted to A2.7 million)
and was recorded in personnel expenses.
(4) Earnings per share
Earnings per share are calculated by dividing net income attributable to shareholders by the weighted average
number of shares outstanding during the period. In accordance with IAS 33.41 4,614 thousand shares (2010: 9,943
thousand shares) dilutive potential shares of the convertible bonds were not included in the computation of diluted
earnings per share as they were anti-dilutive.
Q1 2011 Q1 2010
Net income attributable to shareholders of Klöckner & Co SE . . . (A thousand) 43,462 1,166
Weighted average number of shares ....................... (thousands of shares) 66,500 66,500
Basic earnings per share .............................. (E/share) 0.65 0.02
Net income attributable to shareholders of Klöckner & Co SE . . . (A thousand) 43,462 1,166
Interest expense on dilutive convertible bonds (net of tax) ...... (A thousand) 3,837 —
Net income used to determine diluted earnings per share ....... (A thousand) 47,299 1,166
Weighted average number of shares ....................... (thousands of shares) 66,500 66,500
Dilutive potential shares from convertible bonds. . ............ (thousands of shares) 11,979 —
Weighted average number of shares for diluted earnings per (thousands of shares)
share ............................................
78,479 66,500
Diluted earnings per share ............................ (E/share) 0.60 0.02
(5) Inventories
March 31, December 31,
2011
2010
(E million)
Cost ............................................................ 1,080.0 942.8
Valuation allowance (net realizable value) ................................ (36.8) (44.0)
Inventories ...................................................... 1,043.2 898.8
F-9

(6) Financial liabilities
March 31, December 31,
2011
2010
(E million)
Non-current financial liabilities
Bonds. .......................................................... 534.3 527.8
Liabilities to banks ................................................. 258.0 256.5
Promissory notes. .................................................. 144.5 144.4
Liabilities under ABS programs. ....................................... 155.9 87.2
Finance lease liabilities .............................................. 4.4 4.7
1,097.1 1,020.6
Current financial liabilities
Bonds. .......................................................... 9.3 5.5
Liabilities to banks ................................................. 30.6 29.9
Promissory notes. .................................................. 3.7 2.0
Liabilities under ABS programs. ....................................... 0.3 0.1
Finance lease liabilities .............................................. 2.0 2.1
45.9 39.6
Financial liabilities as per consolidated balance sheet. ..................... 1,143.0 1,060.2
Net financial debt developed as follows:
March 31, December 31,
2011
2010
(E million)
Financial liabilities as per consolidated balance sheet. ..................... 1,143.0 1,060.2
Transaction cost ................................................... 12.2 11.7
Gross financial liabilities ............................................ 1,155.2 1,071.9
Liquid funds . ..................................................... (927.9) (935.0)
Net financial debt Klöckner & Co Group ............................... 227.3 136.9
In March 2011 the syndicated loan (Multi Currency Revolving Credit Facility) was early extended until
May 28, 2014 and the terms were modified to allow for more flexibility with regard to additional debt (“Preferential
Debt”) to be incurred in connection with future acquisitions.
Also in March the European ABS-Program was extended for one year and the pricing was revised.
(7) Subsequent events
For simplification of legal structure the German intermediate holding companies Multi Metal Beteiligungs
GmbH, Klöckner & Co International GmbH and Klöckner & Co Verwaltung GmbH were subject to a multi-level
merging process with Klöckner & Co SE. This transaction is expected to be finalized by entry of the merger of Multi
Metal Beteiligungs GmbH to the Klöckner & Co SE in May 2011. The mergers had no influence on the net assets,
financial position and results of operations.
In addition, promissory notes with a total volume of A 148 million were issued subsequent to the end of the
reporting period. The terms and conditions predominately comply with the promissory notes issued in the previous
year. The instruments’ time to maturity ranges between 4.5 and 5 years.
At the end of April the acquisition of 100% of the Macsteel Service Centers, USA, Inc. (MSCUSA) was closed.
MSCUSA has 30 locations and is one of the leading metal service center companies in the US. In 2010 MSCUSA
had sales of approximately USD 1.3 billion and had 1,183 employees. Klöckner & Co SE has strengthened its
market position by more than doubling its sales from the US and expanding its product and service range through
expansion of its high value-added steel service center business. The preliminary purchase price amounts to
USD 660 million.
F-10

The transaction is a significant acquisition in accordance with IFRS 3. Due to the transaction coinciding with
the compilation of the interim financial statements further information according to IFRS 3.B64 cannot be
published at present.
In May, Klöckner & Co signed an agreement to acquire 70% of the interests in the Brazilian Frefer Group
(“Frefer”). With approximately 360 employees in 14 locations Frefer generated sales of approximately
BRL 340 million in 2010.
(8) Related party transactions
Within the framework of its ordinary business activities, the Klöckner & Co Group has business relationships
with numerous companies. These also include related parties that were accounted for at cost. Business relations
with these companies do not fundamentally differ from trade relationships with other companies. No material
transactions were conducted with any of these companies in the year under review.
Certain members of the Supervisory Board were or are Members of the Supervisory Board or Management
Board of other entities. Klöckner & Co holds business relations to certain of such entities. Business with such
entities is transacted at arm’s length.
(9) Segment reporting
Headquarters/
Europe North America Consolidation Total
2011 2010 2011 2010 2011 2010 2011 2010
(E million)
Segment sales . . ................. 1,290.1 857.9 296.7 190.9 — — 1,586.8 1,048.8
EBITDA (segment result) . . . ....... 81.0 24.5 30.0 9.1 (6.5) (4.5) 104.5 29.1
EBIT......................... 68.2 12.5 24.5 3.0 (6.8) (4.8) 85.8 10.7
Net working capital March 31, 2011
(December 31, 2010) ............ 966.0 850.8 199.6 158.2 (2.4) 8.3 1,163.2 1,017.3
Employees as of March 31, 2011
(December 31, 2010) ............ 8,240 8,187 1,414 1,381 135 131 9,789 9,699
Reconciliation of EBIT to income before taxes:
2011 2010
(E million)
Earnings before interest and taxes (EBIT) ........................................ 85.8 10.7
Financial result (Group) ..................................................... (19.3) (15.2)
Income before taxes (Group) ................................................ 66.5 (4.5)
Duisburg, May 10, 2011
Klöckner & Co SE
Management Board
F-11

REVIEW REPORT
To Klöckner & Co SE
We have reviewed the condensed interim consolidated financial statements of the Klöckner & Co SE —
comprising the consolidated statement of financial position as of March 31, 2011, the consolidated statement of
income, statement of comprehensive income, consolidated statement of cash flow and summary of changes in
equity for the period from January 1 to March 31, 2011, as well as selected explanatory notes on the interim
consolidated financial statements — together with the interim group management report of the Klöckner & Co SE
as of March 31, 2011, that are part of the quarterly financial report according to § 37 x Abs. 3 WpHG in conjunction
with § 37 w Abs. 2 WpHG (,,Wertpapierhandelsgesetz“: ,,German Securities Trading Act“). The preparation of the
condensed interim consolidated financial statements in accordance with those IFRS applicable to interim financial
reporting as adopted by the EU, and of the interim group management report in accordance with the requirements of
the WpHG applicable to interim group management reports, is the responsibility of the Company’s management.
Our responsibility is to issue a report on the condensed interim consolidated financial statements and on the interim
group management report based on our review.
We performed our review of the condensed interim consolidated financial statements and the interim group
management report in accordance with the German generally accepted standards for the review of financial
statements promulgated by the Institut der Wirtschaftsprüfer (IDW) and additionally observed the International
Standard on Review Engagements 2410 (ISRE 2410). Those standards require that we plan and perform the review
so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim
consolidated financial statements have not been prepared, in material respects, in accordance with the IFRS
applicable to interim financial reporting as adopted by the EU, and that the interim group management report has
not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim
group management reports. A review is limited primarily to inquiries of company employees and analytical
assessments and therefore does not provide the assurance attainable in a financial statement audit. Since, in
accordance with our engagement, we have not performed a financial statement audit, we cannot issue an auditor’s
report.
Based on our review, no matters have come to our attention that cause us to presume that the condensed interim
consolidated financial statements have not been prepared, in material respects, in accordance with the IFRS
applicable to interim financial reporting as adopted by the EU, or that the interim group management report has not
been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group
management reports.
Düsseldorf, May 10, 2011
KPMG AG
Wirtschaftsprüfungsgesellschaft
Philippi Michels-Scholz
Wirtschaftsprüfer Wirtschaftsprüfer
F-12

AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
KLÖCKNER & CO SE AS OF AND FOR THE FINANCIAL YEAR
ENDED DECEMBER 31, 2010 (IFRS)
F-13

Consolidated statement of income for the 12-month period ending December 31, 2010
Notes 2010 2009
(E thousand)
Sales .................................................... (7) 5,198,181 3,860,493
Other operating income ....................................... (8) 35,822 127,359
Change in inventory ......................................... (7,383) (8,661)
Own work capitalized ........................................ 39 10
Cost of materials ............................................ (9) (4,054,830) (3,206,830)
Personnel expenses .......................................... (10) (486,618) (441,184)
Depreciation, amortization and impairments ........................ (85,783) (109,638)
thereof impairment losses. ................................... — (41,782)
Other operating expenses. ..................................... (11) (447,442) (399,684)
Operating result ........................................... 151,986 (178,135)
Income from investments. ..................................... 5 2
Finance income ............................................. 8,793 9,006
Finance expenses ........................................... (76,443) (70,705)
Financial result ............................................ (12) (67,650) (61,699)
Income before taxes. ........................................ 84,341 (239,832)
Income taxes. .............................................. (13) (4,129) 54,168
Net income ............................................... 80,212 (185,664)
thereof attributable to
— shareholders of Klöckner & Co SE .......................... 77,541 (188,484)
— non-controlling interests .................................. 2,671 2,820
Earnings per share ......................................... (14)
— basic ................................................ 1.17 (3.61)
— diluted ............................................... 1.17 (3.61)
F-14

Statement of comprehensive incomefor the 12-month period ending December 31, 2010
2010 2009
(E thousand)
Net income .........................................................
Income/expenses directly recognized in equity
80,212 (185,664)
Foreign currency translation ............................................. 79,349 (6,788)
Gain/loss from cash flow hedges. ......................................... (27,187) 19,900
Related income tax. ................................................... 2,773 (3,602)
Other comprehensive income ........................................... 54,935 9,510
Total comprehensive income. ........................................... 135,147 (176,154)
thereof attributable to
— shareholders of Klöckner & Co SE .................................... 132,431 (178,989)
— non-controlling interests ............................................ 2,716 2,835
F-15

Consolidated statement of financial position as of December 31, 2010
Notes
December 31, December 31,
2010
2009
(E thousand)
Assets
Non-current assets
Intangible assets ........................................... (15a) 227,323 194,985
Property, plant and equipment. ................................ (15b) 524,169 426,151
Investment property ........................................ (15c) 10,486 11,675
Financial assets ........................................... 2,721 2,376
Other assets .............................................. (18) 32,027 26,736
Income tax receivable. ...................................... (13) — 11,638
Deferred tax assets ......................................... (13) 59,235 38,355
Total non-current assets ....................................
Current assets
855,961 711,916
Inventories ............................................... (16) 898,841 570,918
Trade receivables .......................................... (17) 703,101 464,266
Income tax receivable. ...................................... (13) 34,251 72,224
Other assets .............................................. (18) 62,898 65,840
Liquid funds ............................................. (19) 934,955 826,517
Assets held for sale ........................................ (20) 1,088 1,081
Total current assets ....................................... 2,635,134 2,000,846
Total assets ..............................................
Equity and liabilities
Equity
3,491,095 2,712,762
Subscribed capital ......................................... 166,250 166,250
Capital reserves ........................................... 464,243 429,493
Retained earnings .......................................... 596,162 518,621
Accumulated other comprehensive income ....................... 48,721 (6,169)
Equity attributable to shareholders of Klöckner & Co SE ......... 1,275,376 1,108,195
Non-controlling interests. .................................... 15,118 15,068
Total equity .............................................
Non-current liabilities and provisions
(21) 1,290,494 1,123,263
Provisions for pensions and similar obligations .................... (23) 174,442 174,598
Other provisions. .......................................... (24) 31,513 31,287
Income tax liabilities ....................................... (13) — 20
Financial liabilities ......................................... (25) 1,020,582 618,744
Other liabilities ........................................... (27) 54,945 31,080
Deferred tax liabilities ...................................... (13) 79,910 71,029
Total non-current liabilities .................................
Current liabilities
1,361,392 926,758
Other provisions. .......................................... (24) 107,259 109,868
Income tax liabilities ....................................... (13) 31,638 50,667
Financial liabilities ......................................... (25) 39,578 52,169
Trade payables ............................................ (26) 584,614 398,387
Other liabilities ........................................... (27) 76,120 51,650
Total current liabilities ..................................... 839,209 662,741
Total liabilities ........................................... 2,200,601 1,589,499
Total equity and liabilities .................................. 3,491,095 2,712,762
F-16

Consolidated statement of cash flows for the 12-month period ending December 31, 2010
2010 2009
(E thousand)
Income before taxes .................................................. 84,341 (239,832)
Financial result ...................................................... 67,650 61,699
Depreciation and amortization ........................................... 85,783 109,638
Other non-cash income and expenses ...................................... (836) (80,128)
Gain on disposal of non-current assets ..................................... (1,781) (9,066)
Operating cash flow ................................................. 235,157 (157,689)
Changes in provisions .................................................
Changes in other assets and liabilities
(35,613) (54,441)
Inventories ....................................................... (168,180) 431,161
Trade receivables. .................................................. (136,724) 337,589
Other receivables. .................................................. 12,188 24,321
Trade payables .................................................... 108,157 581
Other liabilities .................................................... 20,410 (30,139)
Income taxes paid .................................................... (207) 13,279
Cash flow from operating activities ..................................... 35,188 564,662
Proceeds from the sale of non-current assets and assets held for sale .............. 3,708 14,665
Payments for intangible assets, property, plant and equipment. ................... (26,976) (25,023)
Acquisition of subsidiaries. ............................................. (164,480) (779)
Margin deposits for derivative transactions .................................. — 3,105
Cash flow from investing activities ...................................... (187,748) (8,032)
Issue proceeds of convertible bond (incl. equity component) ..................... 183,257 95,681
Capital repayment (non-controlling interest). ................................ (1,157) —
Capital increase by issuance of new shares ................................. — 193,134
Dividend payments to non-controlling interests .............................. (1,509) (980)
Borrowings ......................................................... 336,934 71,972
Repayment of financial liabilities. ........................................ (164,325) (355,497)
Repayment of BSS shareholder loans. ..................................... (57,878) —
Interest paid ........................................................ (48,375) (34,635)
Interest received ..................................................... 5,027 6,477
Cash flow from financing activities ...................................... 251,974 (23,848)
Changes in cash and cash equivalents .................................... 99,414 532,782
Effect of foreign exchange rates on cash and cash equivalents ................... 9,024 204
Cash and cash equivalents at the beginning of the period ....................... 826,517 293,531
Cash and cash equivalents at the end of the period ......................... 934,955 826,517
F-17

Summary of changes in consolidated equity
Subscribed
capital
of Klöckner
&CoSE
Capital
reserves of
Klöckner
&CoSE
Retained
earnings
Accumulated other
comprehensive income
Currency
translation
adjustment
Fair value
adjustments
of financial
instruments
Equity
attributable
to shareholders
of Klöckner
&CoSE
Noncontrolling
interests Total
(E thousand)
Balance as of January 1, 2009 ......
Income/expenses directly recognized in
equity
116,250 260,496 708,272 15,289 (30,953) 1,069,354 11,998 1,081,352
Foreign currency translation . . . . . . (6,803) (6,803) 15 (6,788)
Gain/loss from cash flow hedges . . . 19,900 19,900 19,900
Related income tax 2,508 (6,110) (3,602) (3,602)
Net income . . . . . . . . . . . . . . . . . . . (188,484) (188,484) 2,820 (185,664)
Total comprehensive income
Acquisition of non-controlling
(178,989) 2,835
interests . . . . . . . . . . . . . . . . . . . . (1,167) (1,167) 1,165 (2)
Change in scope of consolidation
Equity component of convertible
50 50
bond . . . . . . . . . . . . . . . . . . . . . .
Capital increase by issuance of new
25,863 25,863 25,863
shares . . . . . . . . . . . . . . . . . . . . . 50,000 143,134 193,134 193,134
Dividends . . . . . . . . . . . . . . . . . . . . (980) (980)
Balance as of December 31, 2009 ... 166,250 429,493 518,621 10,994 (17,163) 1,108,195 15,068 1,123,263
Balance as of January 1, 2010 ......
Income/expenses directly recognized in
equity
166,250 429,493 518,621 10,994 (17,163) 1,108,195 15,068 1,123,263
Foreign currency translation . . . . . . 79,304 79,304 45 79,349
Gain/loss from cash flow hedges (27,187) (27,187) (27,187)
Related income tax . . . . . . . . . . . . (5,581) 8,354 2,773 2,773
Net income . . . . . . . . . . . . . . . . . . . 77,541 77,541 2,671 80,212
Total comprehensive income
Equity component of convertible
132,431 2,716
bond . . . . . . . . . . . . . . . . . . . . . . 34,750 34,750 34,750
Capital repayment subsidiary . . . . . . . (1,157) (1,157)
Dividends . . . . . . . . . . . . . . . . . . . . (1,509) (1,509)
Balance as of December 31, 2010 ... 166,250 464,243 596,162 84,717 (35,996) 1,275,376 15,118 1,290,494
F-18

Notes to the consolidated financial statements of Klöckner & Co SE, Duisburg, as of December 31, 2010
(1) Company information
Klöckner & Co SE is a listed corporation domiciled in Duisburg, Am Silberpalais 1. Klöckner & Co SE is
entered in the commercial register of the Duisburg Local Court under HRB 20486. The consolidated financial
statements of Klöckner & Co SE and its subsidiaries (“Klöckner & Co Group” or “Group”) were authorized for
issuance to the Supervisory Board by way of resolution of the Management Board on February 21, 2011. The
Supervisory Board’s responsibility is to audit such financial statements and to issue a statement as to whether it will
approve the consolidated financial statements.
The Klöckner & Co Group is the largest mill-independent multi metal distributor in the combined market
Europe and North America. Alongside trading of steel, aluminum and various industrial products, it also provides a
range of associated services.
The shares of Klöckner & Co SE were listed in the MDAX» on January 29, 2007.
(2) Accounting policies
The consolidated financial statements as of December 31, 2010 were prepared in accordance with International
Financial Reporting Standards (“IFRS”), as adopted by the EU, and the additional requirements of the
German Commercial Code (“HGB” — Handelsgesetzbuch) pursuant to Section 315a para. 1 HGB. All binding
IFRS and the associated interpretations of the IFRS Interpretations Committee (“IFRIC”) as of December 31, 2010
were applied.
The financial statements or interim financial statements of the companies included in the consolidated
financial statements, all of which have been prepared as of December 31, 2010, are based on uniform accounting
policies.
The consolidated financial statements are prepared in Euros. Unless otherwise indicated, all amounts are stated
in thousands of Euros (A thousand). Deviations from the unrounded amounts may arise.
With the exception of certain financial instruments that are accounted for at fair value, the consolidated
financial statements have been prepared on the historical cost basis.
(3) Scope and principles of consolidation
Scope of consolidation
The consolidated financial statements incorporate the financial statements of Klöckner & Co SE and the
companies controlled by Klöckner & Co SE (“subsidiaries”). Control is achieved when Klöckner & Co holds the
majority of the voting rights or by other means is able to govern the financial and operating policy of an entity in
order to obtain the economic benefit from its activities.
Under the Group’s European asset-backed securitization program (“ABS program”) a total of 13 specialpurpose
entities were formed. In 2010 eight dormant special-purpose entities which were acquired in the prior year
were merged, leaving five special-purpose entities in operation. None of the Group companies holds an equity
interest in four of the remaining special-purpose entities. However, they were established for the sole purpose of
purchasing and collecting receivables of Klöckner & Co subsidiaries.
As such the economic substance of the relationship between Klöckner & Co and these special-purpose entities
indicates that these companies are also controlled by Klöckner & Co and are therefore to be included in the
consolidated financial statements. A further special-purpose entity which is responsible for the acquisition of trade
receivables under the American ABS program is consolidated under the general consolidation rules.
The financial statements of subsidiaries acquired or disposed of in the course of the financial year are included
in the consolidated financial statements from the time control is achieved to the time it is surrendered.
Intragroup receivables, liabilities and intercompany results as well as intragroup income and expenses are
eliminated in consolidation. Consolidation entries are subject to deferred taxes. Deferred tax assets and liabilities
are offset against each other if the term and levying taxation authority are identical.
F-19

The scope of consolidated companies changed as follows:
2010 2009
Consolidated entities at the beginning of the financial year *) ............................ 109 116
+ business combinations ...................................................... 6 —
+ newly formed/consolidated companies. .......................................... 2 2
- mergers ................................................................. (19) (3)
- disposals and liquidations .................................................... (2) (6)
Consolidated entities at the end of the financial year ............................... 96 109
thereof domestic entities including Klöckner & Co SE *) ............................. 15 10
*) Including consolidated special-purpose entities.
6 (2009: 5) subsidiaries which do not have a significant impact on the Group’s net assets, financial results and
results of operations are not consolidated. Net income of these entities represents only – 0.08% (2009: – 0.01%) of
consolidated net income. The impact on the Group’s equity amounts to – 1.08% (2009: – 1.24%). Such subsidiaries
are accounted for as financial assets at cost as their fair values cannot be determined reliably.
Joint ventures
A joint venture is a contractual agreement under which Klöckner & Co and other parties undertake an activity
that is subject to joint control. Joint venture agreements that involve the establishment of a separate entity in which
each venturer has an interest are referred to as jointly controlled entities.
As jointly controlled entity the 50% interest in Debrunner Koenig Informatik AG, Dietikon, Switzerland, was
accounted for under the equity method until its disposal on January 21, 2010.
Under the equity method investments in associated companies are carried at cost as adjusted for postacquisition
changes in the Group’s share of the net assets of the investee. Proportionate losses exceeding the
carrying amount of the associated company are not recognized unless an obligation to compensate such losses
exists. Any goodwill recognized upon acquisition is included in the carrying amount of the investee. Unrealized
intercompany profits from transactions with associated companies carried at equity are eliminated.
A list of affiliated companies included in the consolidated financial statements is attached as annex to the
notes.
(4) Significant accounting policies
Business combinations
Business combinations are accounted for under the purchase method whereby the cost of the investment is
offset against the investee’s net assets which are remeasured to fair value. The net assets are based on the fair values
of the assets and liabilities, including identifiable intangible assets and contingent liabilities to be recognized as
liabilities, as of the date of acquisition.
If published exchange or market prices cannot be obtained for allocating the purchase price, the fair values are
calculated on the basis of suitable valuation techniques. Generally, the discounted cash flow method is used in such
cases. Under this method, the expected future cash flows that can be generated by the asset are discounted to the date
of the initial consolidation using a discount rate reflecting the inherent risk associated to the asset.
Any remaining excess of the cost of the acquired company over its proportional share of net assets is
recognized separately as goodwill; any negative difference is upon reassessment of the acquired assets and
liabilities directly recognized in the income statement. The full goodwill method is not applied. Audit and
consulting fees incurred in business combinations are expensed as incurred.
Subsequent changes in interests in consolidated subsidiaries that do not result in a change of the method of
consolidation are treated as equity capital transactions.
Foreign currency translation
Transactions denominated in foreign currency are translated using the exchange rate at the time of the
transaction. Monetary items are translated using the current exchange rate at the balance sheet date. Irrespective of
F-20

any currency hedges, gains or losses from the remeasurement of monetary assets and liabilities are recognized in the
income statement as other operating income or expenses.
Applying the functional currency concept, the annual financial statements of the foreign subsidiaries prepared
in foreign currency are translated into Euros using the modified closing rate method. The functional currency is
determined by the primary economic environment in which the entity operates. All subsidiaries conduct their
business independently in their domestic markets. As such, the functional currency for those entities is the local
currency. Assets and liabilities of subsidiaries are translated at the middle rate on the reporting date while income
and expenses are translated at the average exchange rate of the reporting period. Differences arising from such
translations applied to the assets, liabilities and components of net income are reported as a separate component of
equity and accordingly do not have an impact on net income. Such differences are recognized in net income when
the subsidiary is sold.
The exchange rate changes for the main currencies of the Group developed as follows:
Closing rate Average rate
December 31, 2010 December 31, 2009 2010 2009
1 E =
US Dollar (USD) .......................... 1.3362 1.4405 1.3257 1.3949
Pound Sterling (GBP). ...................... 0.8608 0.8881 0.8578 0.8909
Swiss Franc (CHF). ........................ 1.2504 1.4836 1.3803 1.5100
Revenue recognition
Revenues from sales of goods are recognized when the material risks and rewards associated with ownership
have been transferred to the buyer and the amount of revenues can be reliably measured. This is generally the time
of delivery. Prior to delivery, revenues are only recognized when goods have not been delivered at the request of the
buyer but ownership has been transferred and the buyer has accepted billing. Sales are reported net of allowances
such as commissions, trade discounts and rebates.
Interest income is accrued on a time basis by reference to the principal amount and the effective interest rate.
Dividend income is recognized when the right to receive payment has been established.
Share-based payment
The Group’s share-based compensation plans are virtual stock option plans with cash settlement (“VSO”). As
of the respective reporting date, a provision is recognized pro rata temporis in the amount of the fair value of the
payment obligation; any subsequent change in the fair value is recognized in profit or loss. The fair value of the
virtual share options is calculated using an option pricing model based on a Monte Carlo simulation using the
following parameters:
December 31, 2010 December 31, 2009
%
Risk-free rate or return ..................................... 0.6–2.6 0.8–3.2
Expected volatility ........................................ 39.0 51.0
The expected volatility is based on market-traded options on Klöckner & Co shares.
Earnings per share
Basic earnings per share are calculated by dividing consolidated net income for the year attributable to
shareholders of Klöckner & Co SE by the average number of shares outstanding during the period. The dilutive,
potential shares of the outstanding convertible bonds are included in the calculation of diluted earnings to the extent
that such shares are not anti-dilutive.
Income taxes
Income tax expense represents the total of current and deferred tax expenses.
Current tax expenses are calculated on the basis of the taxable income for the financial year. The taxable
income differs from the income before taxes for the year reported in the income statement as it does not include
income or expenses that will not be taxable or tax deductible until later financial years, if at all. Tax liabilities are
measured at the amount for which payment to the taxation authorities is expected. The liabilities are measured at the
tax rates that have been enacted or substantively enacted at the balance sheet date.
F-21

Deferred taxes are calculated in line with the concept of the balance sheet liability method. Deferred tax assets
result from temporary differences in the carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable profits and from consolidation
entries. Such deferred tax assets or liabilities are not recognized if the temporary differences arise from goodwill (as
long as these differences were not considered for tax purposes) or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that neither affects taxable profits nor the
accounting profits.
A deferred tax asset is also recognized for the carryforward of unused tax losses to the extent that it is probable
that future taxable profit will be available against which the unused tax losses can be utilized.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow part of or the entire deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each
balance sheet date and a previously unrecognized deferred tax asset is recognized to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are calculated using tax rates that have been enacted or substantively enacted
by the balance sheet date. The measurement of deferred tax liabilities and deferred tax assets reflects the tax
consequences that would follow from the manner in which Klöckner & Co expects, at the balance sheet date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right to set off exists and the
deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority and a
net settlement is intended.
Current and deferred taxes are recognized in income unless they relate to items that are recognized directly in
equity. In such cases, they are also charged or credited to equity.
Intangible assets
Intangible assets with finite useful lives are carried at cost less accumulated amortization if the use of the asset
entails an economic benefit and the costs of the asset can be reliably determined.
Intangible assets are amortized on a straight-line basis in line with their estimated useful life over a period
generally between one and 15 years. The useful life is reviewed annually and future expectations are adjusted if
necessary. Intangible assets with an indefinite useful life — at Klöckner & Co only goodwill — that are not being
amortized are reviewed for impairment annually or more frequently if indications for impairment arise.
Property, plant and equipment
Property, plant and equipment is carried at acquisition or manufacturing cost less accumulated depreciation.
The manufacturing costs comprise all direct costs as well as attributable overheads. Administrative costs are
capitalized to the extent they relate to production.
Maintenance and repair costs are expensed as incurred.
Property, plant and equipment subject to depreciation is generally amortized on a straight-line basis. On
disposal or retirement, the cost and the corresponding accumulated depreciation are derecognized, any gain or loss
is recognized in income.
Depreciation is based on the following useful lives:
Useful life in years
Office building, factory and warehouse buildings ................................. 10–50
Plant facilities similar to buildings. ........................................... 8–33
Warehouse and crane equipment and other technical equipment ...................... 2–20
Operating and office equipment .............................................. 1–15
Leases
For leasing transactions the Company differentiates between finance lease and operating lease transactions.
Transactions, in which the Company bears all significant risks and benefits, are classified as finance leases. All
other lease arrangements in which Klöckner & Co is the lessee are accounted for as operating leases.
F-22

Assets held under finance leases are initially recognized at fair value at the inception of the lease, or if lower, at
the present value of the minimum lease payments. The corresponding liability is included in the balance sheet as
financial liability. Such liabilities are subsequently accounted for under the effective interest method. Assets held
under finance leases are depreciated over their expected useful lives, or where shorter, the term of the underlying
lease.
For operating lease arrangements in which Klöckner & Co is lessee lease payments are recognized as expense
straight-line over the lease term.
Investment property
Land and buildings held to earn rentals or for capital appreciation rather than for use in the delivery of goods or
for providing services or for administrative purposes are presented as investment property. Measurement of such
property follows the cost model. The fair values of such property are disclosed in Note 15 Intangible assets,
property, plant and equipment and investment property.
Depreciation methods and useful lives are similar to those for property, plant and equipment.
Impairment
At each balance sheet date, the Group reviews its tangible and intangible assets as well as its investment
properties to determine if there is any indication of impairment. If such indication exists, the recoverable amount of
the asset is estimated to determine the extent of the impairment loss. The recoverable amount is the higher value of
the fair value less cost to sell and the value in use. In those instances in which the recoverable amount for the specific
asset cannot be estimated, the recoverable amount is determined for the cash-generating unit to which the asset
belongs. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit
is increased to the extent that the increased carrying amount does not exceed the carrying amount that would have
been determined if no impairment loss had been recognized for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognized immediately as income.
Goodwill arising from the acquisition of subsidiaries is tested for impairment at least annually. The impairment
test is performed at the level of the cash-generating unit to which the goodwill has been assigned. Cash-generating
units are the lowest reporting level in the Group at which management monitors goodwill for internal reporting
purposes. Except for the Becker Stahl-Service group the national sub-consolidation groups generally represent the
cash-generating units. The annual impairment test for goodwill is performed in the fourth quarter of each financial
year — or more frequently when there is an indication that the unit may be impaired. If the carrying amount exceeds
the recoverable amount, an impairment loss is recognized in the amount of the difference and cannot be reversed in
subsequent periods.
The recoverable amount is the higher value of fair value less cost to sell and value in use. The value in use
represents the discounted cash flow of the asset or cash generating unit, respectively. Value in use or fair value less
cost to sell is usually determined using a discounted cash flow approach. The estimated cash flows are based on the
Company’s current business plan for the following three years, based on management’s estimates for the respective
business unit. The interest rates used reflect the risk specific to the underlying business and the country in which the
business is operated.
Impairment losses are reported in the income statement under impairment losses. Reversals of impairment
losses are included in other operating income.
Government grants and government assistance
Government grants are only recognized when it is reasonably assured that the Company complies with the
conditions attaching to them and the grants are actually received. The grants are recognized in net income in the
same period in which the respective expenses are recognized.
Government grants related to assets, mainly property, plant and equipment, are deducted in arriving at the cost
of the asset.
Grants becoming receivable as compensation for expenses or losses already incurred or for the purpose of
giving immediate financial support with no future related costs are recognized as other operating income in which
they become receivable.
F-23

Inventories
Inventories are stated at the lower of cost or net realizable value. The net realizable value is the estimated
selling price in the ordinary course of business less estimated cost of completion and estimated cost to make the sale.
The manufacturing costs comprise production-related costs calculated on the basis of normal capacity. In addition
to the directly attributable costs, adequate material and production overhead expenses including depreciation are
reflected in the manufacturing costs. Cost is generally assigned to inventories on the basis of the monthly moving
average method. In selected cases the specific identification method is applied.
Financial instruments
Financial instruments are any contracts that give rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
The Group’s financial assets primarily consist of cash and cash equivalents, available for sale financial
instruments, trade receivables and derivative financial instruments with positive fair values. The Group’s financial
liabilities include bonds, liabilities due to banks, trade payables, finance lease liabilities and derivative financial
instruments with negative fair values.
The Klöckner & Co Group recognizes all regular-way contracts as of the settlement date regardless of their
classification. For derivative financial instruments classified as “held for trading” the Group applies trade date
accounting.
The fair value option provided by IAS 39 (Financial Instruments: Recognition and Measurement) is not
applied.
Financial instruments are initially measured at fair value, incl. transaction costs directly attributable to the
acquisition or issue unless such financial instruments are classified at fair value through profit or loss. Subsequent
measurement of financial assets and liabilities depends on the financial instruments classification to categories of
IAS 39.
a) Financial assets and financial liabilities (excluding derivative financial instruments) and equity
instruments issued by Klöckner & Co
Cash and cash equivalents include cash on hand, bank balances and short-term securities with an original
maturity of less than three months with an insignificant risk of changes in value and are stated at nominal value.
Foreign currency balances are converted into Euros at the mid rate on the balance sheet date.
Financial assets at fair value through profit or loss include financial assets initially classified as held for
trading. In the Klöckner & Co Group, this classification only applies for derivative financial instruments unless
designated in a documented hedge. Such instruments are presented as other assets in the Group’s consolidated
financial statements.
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Loans and receivables are measured at amortized cost using the effective interest method. Also assigned to
this category are non-current loans and non-current securities that do not have a quoted market price in an active
market, which are measured at amortized cost.
All identified risks are allowed for by making appropriate valuation adjustments to reflect the risk of default,
taking into account the credit insurance that is in place. The carrying amounts of financial assets are assessed for
impairment if there is objective evidence, such as substantial financial difficulty on the part of the obligor,
knowledge of insolvency proceedings or being overdue.
Non-derivative financial assets that are not assigned to any of the other categories described in IAS 39 are
classified as “available for sale financial assets” and are measured at fair value. Such assets also include shares in
not consolidated subsidiaries and other equity instruments that do not have a quoted market price in an active market
and whose fair value cannot be reliably measured which are accounted for at cost. If required valuation allowances
are established through profit or loss to account for an impairment loss. Impairment losses are reversed when the
reasons for such impairment losses no longer apply unless they relate to “available for sale financial assets” that are
accounted for at cost for which no reversal of impairment losses is allowed.
Financial instruments are initially recognized as a financial liability or an equity instrument in accordance with
the substance of the contractual agreement. An equity instrument is any contract that evidences a residual interest in
the assets of the entity after deducting all its liabilities. An equity instrument is recognized in the amount of the
proceeds received from the issuance less directly attributable transaction costs.
F-24

The components of compound financial instruments such as the convertible bonds are recognized separately as
financial liabilities and equity. The fair value of the liability component is calculated using a market interest rate for
equivalent financial instruments without conversion rights. Subsequent accounting of the liability component will
be on an amortized cost basis until conversion or maturity of the bond. In line with the residual method the
remaining difference represents the equity component which is reported within capital reserves with no subsequent
adjustment. Financial liabilities are either classified as fair value through profit or loss or as other financial
liabilities.
Klöckner & Co Group only classifies derivative financial instruments that are not designated as hedge and are
effective as liabilities measured at fair value through profit or loss. The negative fair value of such instruments is
reported under other liabilities.
Other financial liabilities, including borrowings, are initially recognized at fair value less transaction costs.
After initial recognition, other financial liabilities are measured at amortized cost using the effective interest
method.
b) Derivative financial instruments
The Group uses a variety of derivative financial instruments to manage its exposure to interest and foreign
exchange rate risks. These include forward exchange transactions, currency swaps, cross currency swaps, interest
rate swaps and interest rate collars. Further information is disclosed in Note 30 Derivative financial instruments.
Derivative financial instruments are initially reported at fair value at the conclusion of the agreement. The fair
value is adjusted at each subsequent balance sheet date. Any gain or loss arising from a change in the fair value of a
derivative financial instrument that is not part of a cash flow hedging relationship and for which the hedging
relationship is effective is recognized in the income statement. For derivative financial instruments designated in a
hedging relationship the timing of the recognition of gains or losses is dependent on the nature of the hedge. The
Klöckner & Co Group uses certain derivative financial instruments to hedge recognized assets or liabilities. In
addition, hedge accounting is applied for certain unrecognized firm commitments.
Forward exchange transactions are valued on an item-by-item basis at the forward rate on the balance sheet
date, and exchange rate differences arising because of the contracted forward exchange rate are included in the
income statement.
Interest rate swap amounts from interest rate swap agreements are recognized in the income statement at the
payment date or the balance sheet date. In addition, interest rate swap agreements as well as interest rate caps are
carried at their fair value as of the balance sheet date, and, provided that no hedge accounting is applied, changes in
the fair values are recognized in the income statement for the current reporting period.
Derivative financial instruments designated in hedging transactions are classified as non-current assets or
liabilities if the remaining term of the hedging relationship is more than twelve months or as current assets or
liabilities, respectively, if the remaining term of the hedging relationship is less than twelve months.
Derivative financial instruments not designated in a hedging relationship are classified either as current assets
or liabilities.
c) Hedge accounting
Depending on volume, term and risk structure, the Klöckner & Co Group designates individual derivative
financial instruments as cash flow hedges.
The relationship between the hedged item and the hedging instrument including the risk management
objectives and the strategy for undertaking the hedge transaction are documented at the inception of the hedge.
In addition, at the inception of a hedging transaction and over its term, the Company regularly reviews and
documents whether the hedge is highly effective in terms of compensating the changes in the cash flows of the
hedged item. Information on the fair values of these derivative financial instruments is provided in Note 30
Derivative financial instruments; changes in the reserve for fair value adjustments of financial instruments within
equity can be derived from the statement of changes in equity.
Cash flow hedges
The effective portion of the change in the fair value of derivative financial instruments designated as cash flow
hedges is recognized in equity; the ineffective portion is recognized directly in income or loss. The amounts
recognized in equity are reclassified to profit or loss in the period in which the hedged item is recognized in income.
F-25

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or is
no longer deemed effective. Any cumulative gain or loss deferred in equity at that time remains in equity and is
recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no
longer expected to occur, the cumulative profit or loss deferred in equity is immediately recognized in income or
expense.
Non-current assets held for sale, disposal groups and associated liabilities
Non-current assets or groups of such assets which are disposed of in a single transaction (disposal groups)
including the associated liabilities are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is met only when the
disposal is highly probable and the asset or disposal group is available for immediate sale in its present condition.
Depreciation and amortization is no longer recognized on assets held for sale. They are carried at the lower of
the carrying amount or fair value less costs to sell.
Provisions for pensions and similar obligations
Pension obligations arising from defined benefit plans are determined using the projected unit credit method.
The expected benefits, including dynamic components, are recognized over the total service period of the respective
employee. Actuarial advice is obtained.
Actuarial gains or losses resulting from deviations between forecast and actual changes in plan beneficiaries as
well as actuarial assumptions that exceed 10% of the greater of the present value of the defined benefit obligation
and the fair value of plan assets are amortized over the expected remaining working lives of the participating
employees.
Service costs are reported in personnel expenses, the interest costs for unfunded plans in interest expense.
Any surplus of the assets over the liabilities to be recognized is limited to the cumulative, unrecognized, net
actuarial losses and past service cost, plus the present value of any available refunds and the reduction of future
contributions to the plan.
Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise
amortized on a straight-line basis over the average service period until the benefits become vested.
Employer contributions made by the Klöckner & Co Group to an independent entity under defined contribution
plans and to which no further legal or constructive payment obligations may arise are expensed as incurred.
Other provisions
In accordance with IAS 37 (Provisions, Contingent Liabilities and Contingent Assets), and with IAS 19
(Employee Benefits) if applicable, other provisions allow for all identified obligations and anticipated losses, as
well as all uncertain liabilities, provided they are present obligations and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligations, and that reliable estimate can be made of the
amount of the obligation. A provision is only established for legal or constructive obligation against third parties.
Provisions are recognized at the amount which represents the best estimate of the expenditure required to settle
the present obligation. Any reimbursement is treated as a separate asset and accordingly is not offset against the
provision. The settlement amount also includes expected future cost increases. Where the effect of the time value of
money is material, the amount of the provision is the present value of the expenditure expected to be required to
settle the obligation. The present value is calculated using interest rates that reflect current market assessments and
the risks specific to the liability.
Warranty provisions are accrued based on the expected development of the loss. Provisions for onerous
purchase or sales contracts are established when the projected total future costs exceed the expected sales.
Restructuring provisions are only recognized if a detailed formal restructuring plan is established and
communicated to the involved parties.
Contingent liabilities
Contingent liabilities are possible obligations that arise from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the enterprise or that represent a present obligation that arises from past events but is not recognized
F-26

ecause it is not probable that an outflow of resources will be required to settle the obligation or the amount of the
obligation cannot be measured with sufficient reliability. Unless the possibility of any outflow in settlement is
remote a description of the nature of the contingent liability is provided.
Presentation of the consolidated statement of financial position and consolidated statement of income
Individual items have been combined in the consolidated statement of financial position and the consolidated
statement of income; further information is provided separately in the notes to the consolidated financial statements.
Assets that will be realized within twelve months of the reporting date, as well as liabilities that will be settled
within one year of the reporting date, are classified as current.
The consolidated statement of income is prepared according to the nature of expense method.
Use of estimates
The preparation of the consolidated financial statements requires the Klöckner & Co Group to make
assessments, estimates and assumptions influencing the application of accounting policies in the Group and the
reporting of assets, liabilities, income and expenses. The actual amounts may differ from these estimates. The
estimates and the underlying assumptions are reviewed on an ongoing basis. Adjustments to estimates are
recognized in the period in which the estimate is revised, if the change affects only that period or in the period
of the revision and subsequent periods if more than one period is affected.
Estimates are particularly necessary for the valuation of intangible assets (e.g. in purchase price allocations),
the recognition and measurement of deferred tax assets, the accounting for pension and other obligations as well as
for impairment tests in accordance with IAS 36.
New accounting standards and interpretations
In 2010 the Group initially applied the Annual Improvements (Improvements to IFRSs), the changes to IFRS 2
(Share-based Payment — Group Cash-settled Share-based Payment Transactions), IAS 39 (Eligible Hedged
Items — Amendment to IAS 39 Financial Instruments: Recognition and Measurement) as well as IFRIC 18
(Transfers of Assets from Customers).
The second omnibus standard “Improvements to IFRSs” issued in April 2009 comprised minor adjustments to
ten standards and two interpretations. The changes to IFRS 2 (Share-based Payment — Group Cash-settled Sharebased
Payment Transactions) clarified the application of IFRS 2 for cash-settled transactions in the individual
financial statements of consolidated subsidiaries.
In July 2008 the IASB issued an amendment to IAS 39 (Eligible Hedged Items — Amendment to IAS 39
Financial Instruments: Recognition and Measurement). The amendment clarifies hedge accounting in two specific
situations: the designation of inflation risk as hedged item and a single-sided risk in a hedged item.
IFRIC 18 (Transfers of Assets from Customers), issued in January 2009, relates to accounting and
revenue recognition aspects of arrangements in which an entity up front receives assets or cash or
cash equivalents from a customer that the entity must then use to obtain services.
The initial application of the revised standards and interpretations did not have an impact on the consolidated
financial statements.
In addition the International Accounting Standards Board (IASB) and IFRIC have issued the following
standards and interpretations that are applicable for the Group but whose application is not yet mandatory in the
reporting period. The application of the standards and interpretations is subject to endorsement by the EU, which for
certain standards and interpretations is yet outstanding. The following further standards and interpretations issued
during the reporting period will not have an impact on the Group’s financial statements:
Standard/interpretation
Mandatory
application *)
IAS 24 (rev.) (Related Party Disclosures). .......................................... 2011
IFRIC 19 (Extinguishing Financial Liabilities with Equity Instruments) .................... 2011
Amendments to IAS 32 (Classification of Rights Issues) ............................... 2011
IAS 12 (Deferred Tax Recovery of Underlying Assets) ................................ 2012
*) Related to the financial year of Klöckner & Co.
F-27

In November 2009 the IASB issued IFRS 9 (Financial Instruments) on classification and measurement of
financial instruments. The release marks the finalization of the first part of a three-phase project to replace IAS 39
(Financial Instruments: Recognition and Measurement). IFRS 9 introduces new regulations for the classification
and measurement of financial assets. The standard is to be applied for fiscal years beginning on or after January 1,
2013. Klöckner & Co is currently evaluating the impact on the standard of its consolidated financial statements.
Also in November 2009 the IASB issued changes to IFRIC 14 (The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction). The amendment “Prepayment of a Minimum Funding
Requirement” is limited to certain instances in which an entity is subject to minimum funding requirements and
issues prepayments fulfilling these requirements. The amendment now permits the recognition of the economic
benefits of such payments as an asset. The revised interpretation must be applied in fiscal years beginning on or after
January 1, 2011. Klöckner & Co currently assesses the impact of the revised interpretations on its consolidated
financial statements.
As part of its Annual Improvement Process the IASB issued the third omnibus standard “Improvements to
IFRSs” in May 2010 which comprises adjustments to six standards and one interpretation. Unless otherwise noted
the adjustments are binding for fiscal years beginning on or after January 1, 2011. Klöckner & Co does not expect
that these changes will have a significant impact on the Group’s consolidated financial statements.
Issuing the amendments to IFRS 9 (Financial Instruments) in October 2010 the phase for the classification and
measurement phase of the IASB’s project to replace IAS 39 was closed. The amendments follow the IASB’s
November 2009 issue of IFRS 9, which prescribed the classification and measurement of financial assets. Under the
new requirements the issuer which elected the fair value option must record changes in the fair value of liabilities
resulting from changes in the issuer’s own credit risk directly in other comprehensive income and therefore not
affecting net income. The revised standard is to be applied for fiscal years beginning on or after January 1, 2013.
Klöckner & Co does not expect that the application of the revised standard will have a material impact on its
financial statements.
Also in October 2010 amendments to IFRS 7 (Financial Instruments) were issued. The amendments will allow
users of financial statements to improve their understanding of transfer transactions of financial assets (e.g.,
securitizations), including understanding the possible effects of any risks that may remain with the entity that
transferred the assets. The revised standard is to be applied for fiscal years beginning on or after July 1, 2011.
Klöckner & Co is currently evaluating the impact on the standard of its consolidated financial statements.
(5) Acquisitions and disposals
The Group structure changed as a result of the following acquisitions and disposals in financial years 2010 and
2009.
Acquisitions 2010
Becker Stahl-Service Group
On March 1, 2010, Klöckner & Co completed the acquisition of 100 % of Becker Stahl-Service Group (BSS)
with headquarters in Bönen, Germany, and it has been consolidated since then. The transaction is deemed to be a
material business combination under IFRS 3. The Becker Stahl-Service Group operates one of the largest and most
modern steel service centers in the world. The group has around 500 employees.
F-28

The allocation of the purchase price to the acquired assets and liabilities is as follows:
Fair value
(E million)
Assets
Goodwill .................................................................. 5.5
Other intangible assets ........................................................ 36.3
Property, plant and equipment .................................................. 70.4
Other non-current assets ....................................................... 1.3
Inventories ................................................................. 100.1
Trade receivables ............................................................ 73.9
Other current assets .......................................................... 4.0
Cash and cash equivalents ..................................................... 44.0
Total acquired assets ..........................................................
Liabilities and provisions
335.5
Non-current financial liabilities. ................................................. 27.5
Other non-current liabilities and provisions ......................................... 4.8
Income tax liabilities ......................................................... 8.7
Trade payables .............................................................. 58.8
Current financial liabilities ..................................................... 70.2
Other current liabilities and provisions ............................................ 11.7
Total assumed liabilities ........................................................ 181.7
Acquired net assets ........................................................... 153.8
Purchase price ............................................................... 153.8
thereof paid in cash and cash equivalents ..........................................
Reconciliation transaction volume
153.8
Assumed shareholder loans ...................................................... 57.9
Assumed financial liabilities ..................................................... 39.7
Acquired cash and cash equivalents ................................................ (44.0)
Transaction volume ........................................................... 207.4
Acquired other intangible assets relate with A29.6 million to customer relationships and with A6.3 million to
the trade name. Goodwill primarily represents future earnings potential and is expected to be tax deductible. The
purchased receivables were based on gross contractual amounts of A76.1 million. BSS contributed A517.0 million to
the Group’s net sales and, including one-off effects from the purchase price allocation and real estate transfer tax,
A28.1 million to the Group’s net income. Consolidated sales would have been higher by A89.8 million and net
income would have been higher by A4.7 million, if BSS had been consolidated since the beginning of the reporting
period. Acquisition-related costs (consulting fees) of A0.4 million were recorded in other operating expenses. In the
previous year costs of A0.4 million were already incurred.
Other acquisitions
Bläsi AG
In January, Klöckner & Co acquired, via its Swiss subsidiary Debrunner Koenig Holding AG, the distribution
company Bläsi AG, located in Berne, Switzerland. With this acquisition the Swiss subsidiary now holds a leading
position in the greater Berne area for water supply and building technology products. Bläsi’s main customers are
linked to the construction segment. With its two sites in the greater Berne area, Bläsi generated sales of
approximately A30 million in 2009. Bläsi AG has been included in the Group’s financial statements since January
2010.
Angeles Welding & Mfg., Inc.
In August 2010, the operations of Angeles Welding & Mfg., Inc. (Angeles Welding) and its subsidiary Get
Steel, Inc. were acquired via our US subsidiary Namasco Corp. by form of an asset deal. Angeles Welding conducts
F-29

usiness in the segments of job shop steel fabrication, precision fabricated parts, and steel service center activity. In
fiscal year 2009 Angeles Welding generated sales of about A30 million.
Lake Steel Ltd.
In December 2010 Klöckner & Co acquired the distributor Lake Steel Ltd. in Amarillo, Texas (USA) also via
its US subsidiary Namasco Corp. With the acquisition of Lake Steel Ltd. Namasco extends its activities in northern
Texas (USA). With two locations and around 100 employees, Lake Steel Ltd. also supplies customers in the
surrounding states of New Mexico, Oklahoma, Colorado, Arkansas, Kansas and Louisiana. Sales amounted to
approximately A35 million. Lake Steel Ltd. has been included in the scope of consolidation since December 15,
2010.
The fair values of the acquired assets and liabilities of the other acquisitions, which in part were determined
provisionally, were as follows:
Fair value
(E million)
Assets
Non-current ................................................................ 32.3
thereof goodwill ............................................................. 4.6
Current ................................................................... 46.4
thereof cash and cash equivalents ................................................ 6.8
Liabilities and provisions
Non-current ................................................................ 6.3
Current ................................................................... 10.7
Acquired net assets ........................................................... 61.7
Purchase prices .............................................................. 61.7
thereof paid in cash and cash equivalents .......................................... 61.7
The non-current assets comprise customer relationships of A8.8 million, trade names of A0.7 million and other
intangible assets of A1.6 million. Goodwill primarily represents future earnings potential. The fair value of the
acquired receivables of the other acquisitions amounted to A8.6 million which compares to gross contractual
amounts of A8.9 million.
The other acquisitions since January 1, 2010 contributed sales of A34.4 million and net income of A1.7 million
to the consolidated financial statements. The operations of Angeles Welding were completely integrated into the
existing entities. As such no further information for sales and net income contribution pursuant to IFRS 3.B64
(q) can be made subsequent to the acquisition. Sales and net income would be higher by A49.9 million and by
A2.0 million, respectively, if Angeles Welding and Lake Steel Ltd. would have been consolidated on January 1,
2010. Acquisiton-related cost (consulting fees) of A0.6 million was included in other operating expenses.
Acquisition of non-controlling interests and other changes in controlling interests
2009
By shareholder resolution dated July 15, 2009, the registered capital of Klöckner Distribution Industrielle S.A.
(KDI) was increased. The non-controlling investor did not participate in the capital increase, thereby increasing
Klöckner & Co Verwaltung GmbH’s interest to 96.77%.
Disposals
2009
On August 19, 2009 the Group disposed of its investment in Klöckner Information Services GmbH (KIS) to
third-party investors. The disposal resulted in a gain of approximately A2.5 million which is included in other
operating income. The purchase price was settled by offsetting with existing liabilities.
Notes to the consolidated statement of income
(6) Specific items recognized in net income
There were no material non-recurring items included in net income in 2010. The net income of the preceeding
reporting period was impacted by the reduction of the KDI antitrust fine (A+79 million), fees incurred with the
F-30

estructuring of the ABS program and the syndicated loan (A–8 million) and impairment losses of the cashgenerating
units Spain and United Kingdom (A–41 million).
(7) Sales
The Group’s sales are broken down by region as follows:
2010 2009
(E thousand)
Germany ......................................................... 1,337,168 749,704
EU excluding Germany .............................................. 2,078,691 1,678,944
Rest of Europe. .................................................... 800,381 669,767
North America ..................................................... 884,612 673,460
Central and South America ........................................... 21,899 23,266
Asia/Australia ..................................................... 22,511 18,761
Africa . . ......................................................... 52,919 46,591
Sales ............................................................ 5,198,181 3,860,493
(8) Other operating income
2010 2009
(E thousand)
Foreign currency exchange gains ........................................... 7,338 5,898
Reversal of provisions ................................................... 6,125 10,520
Rental income ......................................................... 5,025 4,274
Income from written-off receivables ......................................... 4,097 5,550
Gain on sale of non-current assets and assets held for sale ........................ 2,226 7,238
Reduction of antitrust fine KDI ............................................ — 80,172
Gain on sale of consolidated subsidiaries ..................................... — 2,496
Other income ......................................................... 11,011 11,211
Other operating income. ................................................ 35,822 127,359
Other income comprises A2,064 thousand (2009: A1,565 thousand) excess customer payments for which the
statute of limitation has been exceeded or credits which are not offset from/to customers and uncharged supplier
deliveries and services as well as several income items each in the amount of less than A1.5 million. Foreign
currency exchange gains and losses resulting from the prolongation of Group internal financial receivables or
financial liabilities are presented on a net basis as other income or other expenses. As such foreign currency
exchange gains of A4,345 thousand (2009: A7,091 thousand) and foreign currency exchange losses of A5,831
thousand (2009: A8,839 thousand) have been offset against each other.
In the previous year the reduction of the antitrust fine against KDI resulted in gains of approximately
A80 million. Including effects of the accretion of approximately A1 million of the provision and the related
compensation claim against former shareholders, the net gain in 2009 amounted to A79 million.
(9) Cost of materials
2010 2009
(E thousand)
Cost of materials, supplies and purchased merchandise ....................... 4,047,917 3,201,301
Cost of purchased services ............................................ 6,913 5,529
Cost of materials .................................................. 4,054,830 3,206,830
F-31

(10) Personnel expenses
2010 2009
(E thousand)
Wages and salaries .................................................... 388,622 349,581
Social security contributions (including welfare benefits) ........................ 80,560 73,775
Retirement benefit cost ................................................. 17,436 17,828
Personnel expenses ................................................... 486,618 441,184
The majority of the personnel expenses relate to remuneration, which comprises wages, salaries, compensation
and all other remuneration for work performed by employees of the Group in the financial year. The mandatory
statutory contributions to be borne by the Company, including in particular social security contributions, are
reported under social security contributions.
Retirement benefit expenses relate to active and former staff or their surviving dependents. These expenses
include net periodic pension costs, employer contributions to supplementary occupational pension plans and
retirement benefit payments by the Company for its employees.
The acquisition of Becker Stahl-Service contributed significantly to the increase of personnel expenses.
In 2010, the following average staff was employed in the Klöckner & Co Group:
2010 2009
Salaried employees ........................................................ 5,209 5,256
Wage earners ............................................................ 4,007 3,892
Apprentices ............................................................. 254 254
9,470 9,402
(11) Other operating expenses
2010 2009
(E thousand)
Forwarding cost. ...................................................... 108,325 83,926
Rental and leasing expenses. ............................................. 68,958 68,752
Third-party services .................................................... 62,820 34,987
Supplies ............................................................ 43,415 37,022
Repair and maintenance ................................................. 37,193 35,342
Other taxes .......................................................... 22,685 22,595
Audit fees and consulting ............................................... 15,428 22,936
Travel expenses ....................................................... 13,585 12,364
Bad debt expenses ..................................................... 10,838 14,595
Credit insurance ...................................................... 9,998 8,132
Postal charges and telecommunication . ..................................... 8,983 10,285
Other insurance ....................................................... 8,867 9,060
Advertising and representation expenses ..................................... 7,518 7,138
Foreign currency exchange losses. ......................................... 5,186 5,375
Other expenses ....................................................... 23,643 27,175
Other operating expenses .............................................. 447,442 399,684
Third party services also include data processing cost of the IT service provider KIS Information Services
GmbH, Duisburg which was spun-off in 2009.
Other expenses relate to fringe benefits, office materials, expenses arising from secondary business and
incidental bank charges.
F-32

(12) Financial result
2010 2009
Income from non-current securities and long-term loans. .........................
(E thousand)
103 13
Other interest and similar income .......................................... 8,690 8,993
Interest and similar expenses. ............................................. (68,899) (62,173)
Interest cost for post-employment benefits .................................... (7,544) (8,532)
Financial result ....................................................... (67,650) (61,699)
The increase in net financial expenses is driven due to higher average net financial debt throughout the fiscal
year. The 2009 financial result is impacted with expenses of approximately A8 million resulting from the
restructuring and stabilization of the financing agreements.
(13) Income taxes
a) Income taxes in the income statement
The income taxes comprise current and deferred taxes.
The utilization of tax loss carryforwards resulted in increased income tax expense of A3,460 thousand (2009:
A2,161 thousand) in 2010 due to the corresponding release of deferred tax assets. In 2010 benefits of A23,365
thousand were recognized as deferred tax assets on loss carryforwards originating in prior years (2009: A0
thousand). Due to tax losses incurred in the current period deferred tax assets of A2,817 thousand were capitalized.
Valuation allowances of A11,024 thousand were established for tax losses of the current reporting period.
Current tax benefits of A526 thousand (2009: expense A13 thousand) related to prior periods. In 2010 the
utilization of previously unrecognized tax loss carryforwards and temporary differences led to current tax benefits
of A7,940 thousand (2009: A1,283 thousand). This was mainly a result of a business combination consummated in
2010 which led to the utilization of previously unrecognized tax loss carryforwards with a tax benefit of A6,927
thousand.
Income tax benefit/expense for the Klöckner & Co Group are broken down as follows:
2010 2009
(E thousand)
Current income tax expense/benefit ....................................... 23,442 (32,535)
Expense (domestic). .................................................... 4,707 998
Expense/benefit (foreign) ................................................ 18,735 (33,533)
Deferred tax benefit ................................................... (19,313) (21,633)
Benefit/expense (domestic) ............................................... (18,801) 3,269
Expense (foreign) ...................................................... (512) (24,902)
Income tax expense/benefit .............................................. 4,129 (54,168)
The combined income tax rate amounts unchanged to 30.7%, comprising the corporate income tax (including
solidarity surcharge) of 15.8% and trade tax Klöckner & Co of 14.9%. Foreign tax rates vary between 10.0% and
40.0%.
F-33

The expected tax benefit/expense is reconciled to the actual tax benefit/expense as follows:
2010 2009
(E thousand)
Expected tax rate ..................................................... 30.70% 30.70%
Income before taxes .................................................. 84,341 (239,832)
Expected tax expense/benefit at domestic tax rate ............................. 25,892 (73,628)
Foreign tax rate differential .............................................. (7,785) (5,254)
Tax effects related to KDI antitrust fine ..................................... — (27,103)
Tax rate changes ...................................................... 102 (1,175)
Reduced tax rate ...................................................... 244 (287)
Tax reduction due to tax free income. ...................................... (4,051) (4,694)
Tax increase due to non-deductible expenses ................................. 5,636 5,799
Current income tax levied for prior periods ..................................
Goodwill impairment and excess of net assets over purchase price in business
(526) 13
combinations. ......................................................
Tax reduction due to first-time recognition of deferred tax assets on temporary
— 267
differences and on loss carryforwards related to prior periods . . .................
Tax benefit resulting from previously unrecognized deferred tax assets on loss
(19,544) (4,189)
carryforwards and on temporary differences ................................
Tax increase due to non-capitalization of deferred tax assets on loss carryforwards and
(7,940) (1,283)
deductible temporary differences ........................................ 11,942 57,520
Other tax effects ...................................................... 159 (154)
Effective income tax benefit/expense ...................................... 4,129 (54,168)
Effective tax rate. .................................................... 4.90% (22.59)%
b) Taxes recognized directly in equity
Current and deferred taxes are generally recognized as income or expense and are included in the net profit or
loss for the period, except to the extent that the tax arises from a transaction or event which is recognized, in the
same or a different period, directly in equity.
Taxes recognized in equity amounted to A2,773 thousand (2009: A—3,602 thousand).
c) Deferred tax assets and liabilities
Deferred tax assets and liabilities are presented in the consolidated statement of financial position as follows:
December 31,
2010
December 31,
2009
(E thousand)
Deferred tax assets ............................................... 59,235 38,355
Deferred tax liabilities ............................................ 79,910 71,029
Deferred taxes, net .............................................. (20,675) (32,674)
F-34

Deferred tax assets and liabilities arise from the following:
DEFERRED TAX ASSETS
December 31,
2010
December 31,
2009
(E thousand)
From temporary differences and consolidations .......................... 68,716 41,235
Intangible assets ............................................... 10,983 6,895
Property, plant and equipment ..................................... 3,361 4,530
Financial assets ................................................ — 524
Inventories ................................................... 559 3,990
Receivables and other current assets ................................ 5,459 1,287
Provisions for pensions and similar obligations ........................ 22,143 21,609
Other provisions and accrued liabilities .............................. 7,460 8,221
Liabilities .................................................... 18,751 12,918
Tax loss carryforwards *) ........................................... 117,064 93,790
Gross amount .................................................. 185,780 153,764
Valuation allowance .............................................. (99,492) (102,714)
Offsetting ...................................................... (27,053) (12,695)
Deferred tax assets .............................................. 59,235 38,355
*) Including interest carryforward.
DEFERRED TAX LIABILITIES
December 31,
2010
December 31,
2009
From temporary differences and consolidations ..........................
(E thousand)
106,963 83,382
Intangible assets ............................................... 6,157 4,872
Property, plant and equipment ..................................... 42,017 35,506
Financial assets ................................................ 29 12
Inventories ................................................... 24,115 18,911
Receivables and other current assets ................................ 11,289 6,624
Provisions for pensions and similar obligations ........................ 1,262 1,403
Other provisions and accrued liabilities .............................. 12,558 16,272
Other liabilities ................................................ 9,536 124
Gross amount .................................................. 106,963 83,724
Offsetting ...................................................... (27,053) (12,695)
Deferred tax liabilities ........................................... 79,910 71,029
A deferred tax asset for unused tax losses is only recognized if it is probable that this benefit can be realized.
Unused tax loss carryforwards as of the reporting date amount to A342.2 million (2009: A353.3 million) for
corporate income tax losses of foreign and domestic entities and trade tax and similar losses of A232.2 million
(2009: A227.2 million). Corporate income tax losses incurred by foreign and domestic subsidiaries of A217.4 million
(2009: A327.5 million) and trade tax and similar losses of A147.8 million (2009: A197.3 million) were not
recognized because it is not probable that they will be used.
The major part of the loss carryforwards does not expire under the current tax regulations, unless specific
circumstances arise (e.g. change of control). To the extent loss carryforwards do expire, this will largely not occur
prior to 2015.
Consistent with deferred tax assets for loss carryforwards a deferred tax asset is recognized for all deductible
temporary differences to the extent that it is probable that taxable profit will be available against which the
deductible temporary difference can be utilized. The initial recognition of deferred tax assets of deductible
temporary differences resulted in tax benefits of A4,084 thousand (2009: A4,161 thousand) which were offset by
valuation allowances of A8,936 thousand for deferred taxes on temporary differences due to changes in tax
consolidations.
F-35

Deferred tax assets were not recognized for temporary differences amounting to A31.3 million (2009:
A59.9 million) at December 31, 2010, as it is not probable that the benefits can be realized.
Unrecognized deferred tax assets are as follows:
December 31,
2010
December 31,
2009
(E thousand)
Temporary differences ............................................ 14,624 18,397
Unused tax losses ................................................ 84,868 84,317
d) Current tax
Tax receivables of A34,251 thousand (2009: A83,862 thousand) were recorded in the consolidated statement of
financial position for expected tax refunds. Of this amount A15,825 thousand (2009: A40,881 thousand) are
attributable to tax refunds resulting from the deduction of withholding taxes on dividends including solidarity
surcharge. The remainder is due to refunds resulting mainly from tax loss carrybacks.
The income tax payables, including withholding taxes of A15,825 thousand, comprise liabilities of A15,882
thousand (2009: A40,884 thousand), when the payment obligation is nearly certain, and provisions of A15,757
thousand (2009: A9,804 thousand), when uncertainty exists concerning the amount or the date of payment.
(14) Earnings per share
Earnings per share are calculated by dividing net income attributable to shareholders by the weighted average
number of shares outstanding during the period. In accordance with IAS 33.41 9,943 thousand (2009: 7,615
thousand) potential dilutive shares of the convertible bonds were not included in the computation of diluted earnings
per share as this would have resulted in higher earnings per share.
Jan. 1 - Dec. 31,
2010
Jan. 1 - Dec. 31,
2009
Net income attributable to shareholders of Klöckner & Co SE (A thousand) . . 77,541 (188,484)
Weighted average number of shares (thousands of shares) ............... 66,500 52,269
Basic earnings per share (E/share) ............................... 1.17 (3.61)
Net income attributable to shareholders of Klöckner & Co SE (A thousand) . . 77,541 (188,484)
Interest expense on dilutive convertible bonds (net of tax) (A thousand) ..... 186 —
Net income used to determine diluted earnings per share (A thousand) ...... 77,727 (188,484)
Weighted average number of shares (thousands of shares) ............... 66,500 52,269
Dilutive potential shares from convertible bonds (thousands of shares) ...... 182 —
Weighted average number of shares for diluted earnings per share (thousands
of shares) ................................................. 66,682 52,269
Diluted earnings per share (E/share) .............................. 1.17 (3.61)
F-36

Notes to the consolidated statement of financial position
(15) Intangible assets, property, plant and equipment and investment property
a) Intangible assets
Licenses, similar
rights and other
intangible assets Software Goodwill
Total
intangible
assets
(E thousand)
Cost as of January 1, 2009 ........................ 161,024 18,619 104,558 284,201
Accumulated amortization and impairments ............ (36,759) (11,511) — (48,270)
Balance as of January 1, 2009 ..................... 124,265 7,108 104,558 235,931
Exchange rate differences . ........................ (2,468) — (2,190) (4,658)
Changes in the scope of consolidation ................ (6) (106) — (112)
Additions ..................................... 96 1,807 — 1,903
Disposals ..................................... — (126) (1,374) (1,500)
Depreciation, amortization and impairments ............ (25,907) (2,759) (7,913) (36,579)
Transfers. ..................................... 161 (161) — —
Balance as of December 31, 2009 .................. 96,141 5,763 93,081 194,985
Cost as of December 31, 2009 *) ..................... 157,799 19,121 100,994 277,914
Accumulated amortization and impairments *) ........... (61,658) (13,358) (7,913) (82,929)
As of January 1, 2010 ........................... 96,141 5,763 93,081 194,985
Exchange rate differences . ........................ 7,423 87 7,145 14,655
Changes in the scope of consolidation ................ 47,064 304 10,109 57,477
Additions ..................................... 15 800 — 815
Disposals ..................................... (1) (8) — (9)
Depreciation, amortization and impairments ............ (37,595) (3,005) — (40,600)
Transfers. ..................................... (59) 59 — —
As of December 31, 2010 ......................... 112,988 4,000 110,335 227,323
Cost as of December 31, 2010 ...................... 214,608 20,540 118,248 353,396
Accumulated amortization and impairments ............ (101,620) (16,540) (7,913) (126,073)
*) Including 2009 accumulated goodwill impairments of the CGUs Spain and United Kingdom.
Goodwill of A92,993 thousand relates to the segment North America and of A17,342 to the segment Europe.
The impairment tests performed on cash generating units (CGU) in the fourth quarter 2010 confirmed the
values of all goodwill. As such no impairments were required (2009: A7.9 million).
Key assumptions used by management in determining the value in use or the fair value less cost to sell
comprise the assessment of expected future gross profit, expected inflations and discount rates. The assumptions are
based both on historical data and expected market developments.
For the reporting period pre-tax discount rates between 9.22% and 12.58% (2009: 10.65% to 13.42%)
depending on the respective cash generating unit were used. To monitor potential impairment exposure the Group
performs simulations using higher discount rates. Based on such simulations even a 0.5 percentage point increase in
the respective discount rate would not trigger goodwill impairments. The Management, however, does not expect
that negative changes in the material assumptions will occur.
F-37

) Property, plant and equipment
Land,
similar land
rights and
buildings
Technical
equipment
and machinery
Other
equipment,
operating
and office
equipment
Construction
in progress
Total
property,
plant and
equipment
Cost as of January 1, 2009 ...........
Accumulated amortization and
636,104 225,779
(E thousand)
216,873 9,514 1,088,270
impairments .................... (291,428) (152,865) (164,436) (120) (608,849)
Balance as of January 1, 2009 ....... 344,676 72,914 52,437 9,394 479,421
Exchange rate differences. ........... 441 398 (207) (22) 610
Changes in the scope of consolidation . . (45) — (1,089) — (1,134)
Additions. ....................... 4,306 6,930 5,583 5,925 22,744
Disposals. .......................
Depreciation, amortization and
(1,211) (812) (1,816) (26) (3,865)
impairments .................... (39,949) (18,559) (13,038) — (71,546)
Transfers ........................ 3,348 3,052 3,596 (9,996) —
Reclassification to assets held for sale . . (79) — — — (79)
Balance as of December 31, 2009 ..... 311,487 63,923 45,466 5,275 426,151
Cost as of December 31, 2009 ........
Accumulated amortization and
638,086 234,651 218,649 5,396 1,096,782
impairments .................... (326,599) (170,728) (173,183) (121) (670,631)
As of January 1, 2010 ............. 311,487 63,923 45,466 5,275 426,151
Exchange rate differences. ........... 23,995 3,425 3,822 412 31,654
Changes in the scope of consolidation . . 54,842 24,525 6,750 286 86,403
Additions. ....................... 4,301 5,964 9,406 6,041 25,712
Disposals. .......................
Depreciation, amortization and
(440) (796) (514) (7) (1,757)
impairments .................... (15,345) (16,253) (12,396) — (43,994)
Transfers ........................ 1,643 2,790 1,398 (5,831) —
As of December 31, 2010 ........... 380,483 83,578 53,932 6,176 524,169
Cost as of December 31, 2010 ........
Accumulated amortization and
736,979 283,656 243,990 6,176 1,270,801
impairments .................... (356,496) (200,078) (190,058 — (746,632)
Property, plant and equipment with a carrying amount of A86,252 thousand (2009: A78,058 thousand) were
used as collateral to secure borrowings of the Group.
No impairment losses were incurred in 2010 (2009: A31,599 thousand for real estate, machines and other
equipment of the CGU Spain.)
Assets held under finance leases
The Group holds various assets under finance leasing contracts, the majority of which contain purchase
options. As of the reporting date, the carrying amounts of capitalized assets were as follows:
Carrying amounts
December 31, December 31,
2010
2009
(E thousand)
Real estate
Spain (Valencia, Catalayud, Epila) .................................. 10,933 11,174
Austria (Vienna, Neumarkt) ....................................... 1,430 1,690
Technical equipment and machinery .................................. 410 5,653
Vehicles ....................................................... 27 126
12,800 18,643
F-38

Upon completion of the lease term assets under finance lease arrangement for which title passes to Klöckner &
Co are reclassified from assets under finance leases to the respective asset class within property, plant and
equipment.
c) Investment property
Investment property is only related to premises in Valencia.
December 31,
2010
December 31,
2009
(E thousand)
Cost as of January 1 .............................................. 13,208 13,208
Accumulated amortization and impairments ............................. (1,533) (20)
As of January 1 ................................................ 11,675 13,188
Depreciation, amortization and impairments ............................ (1,189) (1,513)
As of December 31 .............................................. 10,486 11,675
Cost as of December 31 ........................................... 10,486 13,208
Accumulated amortization and impairments ............................. — (1,533)
The appraised fair value of the premise amounts to A11.6 million (2009: A11.7 million). In 2010 rental income
amounts to A0 thousand (2009: A27 thousand), due to the fact that the building was demolished in 2010. As such cost
as stated in the table above exclusively relates to land. Operating expenses attributable to the premises amounted to
A0 thousand (2009: A7 thousand).
(16) Inventories
December 31,
2010
December 31,
2009
Raw materials and supplies ......................................... 153,417 14,132
Work in progress ................................................ 3,256 5,651
Finished goods and merchandise ..................................... 741,432 551,135
Advance payments ............................................... 736 —
Inventories .................................................... 898,841 570,918
Raw materials also include coils of steel service centers.
Of the inventories recognized as of December 31, 2010, A341,471 thousand (2009: A284,105 thousand) are
stated at net realizable values. Allowances for write-downs to the net realizable value amount to A44,013 thousand
(2009: A70,951 thousand).
In addition to customary reservations of title, inventories with a carrying amount of A117,712 thousand (2009:
A70,487 thousand) serve as collateral for financial liabilities as of December 31, 2010 of A31 thousand (2009:
A1,980 thousand).
(17) Trade receivables
Trade receivables are generally invoiced in the local currency of the relevant Group company; in general export
receivables in foreign currencies are hedged.
The Klöckner & Co Group regularly sells trade receivables under two ABS programs. The trade receivables are
sold by the participating Group companies to two special-purpose entities (SPE).
As the programs do not qualify for derecognition under the requirements of IAS 39, the receivables are
reported on the Group’s consolidated statement of financial position. The refinancing of the purchased receivables
by the SPEs is therefore reported in the consolidated financial statements as loans due to the conduits.
The carrying amount of the receivables of the Group companies participating in the ABS programs as of
December 31, 2010 amounts to A386 million (2009: A293 million).
For further information to the ABS programs see Note 25 Financial Liabilities.
F-39

The following table provides information on the extent of credit risks attributable to trade receivables:
Trade receivables
Of which
not overdue as of
the reporting
date
Of which overdue by days as of the reporting date
1-30 days 31-60 days 61-90 days 91-120 days H 120 days
(E thousand)
Write-downs Carrying amount
December 31, 2010
738,350 557,180 121,557 23,753 6,926 6,335 22,599 (35,249) 703,101
December 31, 2009
493,962 367,835 78,209 17,006 4,800 6,581 19,531 (29,696) 464,266
As of December 31, 2010 trade receivables in the amount of A4,151 thousand (2009: A4,655 thousand) of
entities that do not participate in the Group’s ABS programs were used as collateral for bank loans.
(18) Other Assets
December 31, 2010 December 31, 2009
Current Non-current Current Non-current
(E thousand)
Reimbursement receivable against former shareholders from
KDI antitrust case ................................ — — 3,500 —
Receivables from insurance companies .................. 2,105 — 7,299 —
Commission claims ................................. 31,634 — 20,232 —
Reinsurance claims for pension obligations ............... — 4,420 — 4,475
Prepaid pension cost ................................ — 23,281 — 19,294
Claims for other taxes ............................... 7,347 — 6,166 —
Prepaid expenses. .................................. 8,269 166 5,591 480
Fair value of derivative financial instruments .............. 779 1,471 820 877
Miscellaneous other assets. ........................... 12,764 2,689 22,232 1,610
Other assets. ..................................... 62,898 32,027 65,840 26,736
Miscellaneous other current assets include debit balances in accounts payable of A2,139 thousand (2009:
A1,002 thousand).
(19) Liquid funds
Cash and cash equivalents predominantly include bank balances. As of the reporting date none of these funds
were restricted.
(20) Non-current assets held for sale
Non-current assets held for sale include assets no longer used in operations. The amount of A79 thousand
(2009: A79 thousand) is attributable to land and buildings of the Europe segment and A890 thousand (2009: A784
thousand) to land and buildings and A119 thousand (2009: A218 thousand) to machinery, both of the North America
segment.
(21) Equity and non-controlling interests
a) Subscribed capital
The Company’s subscribed capital amounts unchanged to A166,250,000 and is divided in 66,500,000 shares
with a calculated pro rata share of the capital stock of A2.50 per share.
Acquisition of treasury stock
By resolution of the 2010 Annual General Meeting the Management Board is permitted, until May 25, 2015, to
acquire up to 10% of the existing subscribed capital at the date of the Annual General Meeting or — in case the
amount is lower — the existing subscribed capital as of the date the permission is exercised. The permission may be
exercised in full or in part, in one single or multiple installments by the Company or subsidiaries or by third parties
on behalf of the Company or its subsidiaries. The permission may be exercised for any legal purpose; trading with
treasury stock is prohibited. With this permission the Company is empowered to use the acquisition of treasury
stock as additional source of financing to react quickly and flexibly. No use of this permission has yet been made.
F-40

Conditional capital
By resolutions of the Annual General Meetings in 2007 to 2010 the Company’s share capital was conditionally
increased as follows:
Conditional capital 2007
The conditional capital 2007 established by the Annual General Meeting held on June 20, 2007 in the amount
of A11,625,000 and 4,650,000 shares, respectively, was modified by resolution of the Annual General Meeting held
on May 26, 2010 so that the share capital is now conditionally increased by up to A16,625,000 by issue of up to
6,650,000 non-par-value shares.
Conditional capital 2008
The conditional capital 2008 of A11,625,000 established by the Annual General Meeting held on June 20, 2008
was cancelled by the Annual General Meeting held on May 26, 2010.
Conditional capital 2009
Also by resolution of the Annual General Meeting on May 26, 2010 the conditional capital 2009 established by
the Annual General Meeting in 2009 in the amount of A11,625,000 and 4,650,000 shares respectively was adjusted
so that the share capital is now conditionally increased by A16,625,000 by issue of up to 6,650,000 non-par-value
shares.
Conditional capital 2010
The Annual General Meeting on May 26, 2010 also resolved that the subscribed capital was conditionally
increased by A33,250,000 by issue of up to 13,300,000 non-par-value shares.
The new non-par-value shares are entitled to profits from the beginning of the business year in which they are
issued. The conditional capital serves to grant subscription and/or conversion rights to the holders of option bonds
and/or convertible bonds that are or were issued by the Company or a Group company in accordance with the
authority of the respective Annual General Meeting of the Company.
Authorized capital 2010
The authorized capital per Section 4 para. 2 of articles of association was fully utilized in the 2009 rights issue.
The Management Board was authorized by resolution of the Annual General Meeting on May 26, 2010 to increase
the subscribed capital of the Company with permission of the Supervisory Board by single or multiple installments
against cash contributions or contributions in kind by up to A83,125,000 by issue of up to 33,250,000 non-par-value
shares.
Information pursuant to Sections 21 para. 1, 22 para. 1 Securities Trading Act (WpHG —
Wertpapierhandelsgesetz)
As of the date the financial statements were authorized for issuance the following shareholdings in Klöckner &
Co SE were held:
Notifying institutions Domicile
Voting
interest in
percent
Date on which
threshold was met
Increase over threshold
Norges Bank (Central Bank of Norway) a)
............... Oslo, Norway 5.15 May 20, 2010
Amundi S.A. .................................... Paris, France 3.003 b)
January 28, 2011
a) State of Norway.
b) Partly attributed holding.
A full listing of notifications of increase over or decrease below threshold in accordance with Section 21 para. 1
and Section 22 para. 1 Securities Trading Act (WpHG) is attached as appendix to the notes to the consolidated
financial statements.
F-41

) Capital reserves
As of December 31, 2010 the capital reserves amount to A464,243 thousand (2009: A429,493 thousand). The
variance of A34,750 thousand is due to the equity component of the convertible bond, net of transaction costs and
deferred taxes of A385 thousand.
Capital reserves are presented net of costs incurred in issuing the convertible bond and, to the extent related to
the equity component, are stated net of deferred taxes.
c) Retained earnings
Retained earnings include the accumulated undistributed earnings of the companies included in the consolidated
financial statements, to the extent that no distributions are made outside the Group, as well as effects on
equity from consolidation.
d) Accumulated other comprehensive income
Accumulated other comprehensive income comprises foreign currency translation adjustments resulting from
the translation of the financial statements of foreign subsidiaries and changes in the fair value of cash flow hedges,
net of deferred taxes.
e) Non-controlling interests
Non-controlling interests represent third-party interest in consolidated subsidiaries.
f) Dividend proposal
The Management Board and Supervisory Board propose to the Annual General Meeting to distribute dividends
of A0.30 per share from the retained profits calculated in accordance with the German Commercial Code (HGB).
The development of the individual components of controlling and non-controlling interests for the period from
January 1, 2010 to December 31, 2010, and from January 1, 2009 to December 31, 2009, is shown in the summary of
changes in equity.
(22) Share-based payments
In 2006 the Group established share-based payment programs. Eligible for share-based payment are Management
Board members as well as certain members of the senior management. The Group’s plans are cash-settled
virtual stock option plans.
Management Board program
Under the Management Board programs a total of 602,700 virtual stock options are outstanding as of
December 31, 2010 (2009: 667,800). The Management Board program is classified in three variants.
Variant I (VSO I) originally introduced in 2006 covered five annual tranches. The strike price for the first
tranche has been set to the IPO price in June 2006 of A16/share. The strike price for each subsequent tranche is
increased by 5% over the previous year’s strike price. The individual strike price is reduced by dividends and is
adjusted to reflect potential dilutive effects of rights issues. The conditions of the program were modified to account
for the regulations of the Act on the Appropriateness of Management Board Remuneration (VorstAG). The
modifications primarily entail longer waiting periods. Under the revised conditions the waiting periods for the
initial third, the second and the remaining third of a tranche amount to three, four and five years from the issue date,
respectively. The amount to settle the obligation corresponds to the difference between the average trading price of
the last 30 trading days (XETRA trading, Deutsche Börse AG, Frankfurt a. M.) prior to exercising the option and the
respective strike price of the tranche. The settlement amount is capped at maximum amount of A37 per option.
Variant II (VSO II) also covered five annual tranches, which have been allocated annually since January 1,
2009. The virtual stock options of each tranche of VSO II can be exercised after a 30-day trading period after the
Annual General Meeting of the allotment year of the respective tranche. Subsequent to the waiting period, the
options of the relevant tranches may be exercised in full or in part at any time. In addition, VSO II accounts for a cap
of A25 per option. The strike price was initially based on the non-weighted average closing price of Klöckner & Co
shares over the last 30 consecutive trading days prior to issuance.
Variant III (VSO III) is largely identical to VSO II but also provides for waiting periods of three to five years as
VSO I does.
F-42

In 2010, VSO II was also modified to account for the regulations of the Act on the Appropriateness of
Management Board Remuneration (VorstAG). The modifications entail longer waiting periods for tranches alloted
on or after January 1, 2011 and are therefore now identical to VSO III.
Senior management programs
In addition to the Management Board programs 122,000 (2009: 115,500) virtual stock options for 2010 were granted
and allotted to certain members of the senior management throughout the Group during the first half year of 2010. The
exercise conditions are largely identical to the Management Board program VSO I and VSO III of Klöckner & Co SE.
The total number of outstanding rights developed as follows:
(Number of virtual stock options)
Management Board
programs Other executives Total
Outstanding at the beginning of the year .............. 667,800 180,000 847,800
Granted ........................................ — 122,000 122,000
Exercised ....................................... (65,100) (113,000) (178,100)
Forfeited ....................................... — (1,000) (1,000)
Outstanding at the end of the reporting period ......... 602,700 188,000 790,700
thereof vested .................................. 60,000 76,000 136,000
During the 2010 financial year 178,100 (2009: 187,900) virtual stock options were exercised. Payments for
share-based compensation amounted to A1,333 thousand (2009: A982 thousand). The pro rata provision for sharebased
payments to the Management Board and senior management amounts to A2,660 thousand (December 31,
2009: A2,850 thousand), the intrinsic value of the rights exercisable as of the reporting date amount to A740
thousand. Total expense recognized in 2010 of A1,143 thousand (2009: A1,562 thousand).
To limit expenses and cash flows for the granted and approved further grants of virtual stock options until and
including financial year 2011 the Group entered into certain derivative financial instruments in January 2008. The
instruments are accounted for at fair value through profit or loss in accordance with IAS 39 (Financial Instruments:
Recognition and Measurement).
The positive fair value changes and settlement effects of these instruments in 2010 amount to A2,215 thousand
(2009: A5,368 thousand) and were offset against personnel expenses. The fair values of the financial instruments are
described in Note 30 Derivative financial instruments.
(23) Provisions for pensions and similar obligations
Various types of pension schemes have been established for most employees of the Group, depending on the
legal, economic and tax environment of the respective jurisdictions. Benefits provided are usually based on the
length of service and the employees’ salaries.
Benefits provided comprise of both defined contribution plans and defined benefit plans.
For defined contribution plans, the Company contributes funds to private or public pension institutions on the
basis of statutory or contractual requirements. With these payments the Company is discharged from all further
obligations.
Defined contribution expenses in 2010 amounted to A29,615 thousand (2009: A28,456 thousand). Included
therein are employers’ contributions to the statutory pension schemes in the amount of A25,865 thousand (2009:
A25,366 thousand).
Most of the pension schemes are designed as defined benefit plans, either funded or unfunded.
The following actuarial assumptions were used in the actuarial calculations performed by third-party actuaries:
Germany Austria Switzerland The Netherlands United Kingdom France
United
States
%
Discount rate .... 4.70 4.70 2.90 4.70 5.40 4.70 5.37-5.75
Salary trend ..... 2.50 3.00 2.00 2.50 3.80-4.30 2.00 3.50
Pension trend .... 2.00 2.25 0.50 1.20 3.30 1.25 *)
0.00
Expected return on
plan assets. .... 4.50 — 4.50 4.00 6.60-7.20 4.00 6.50-7.00
F-43

*) Depending on the respective pension plan.
Unchanged to the prior year, the Company uses Prof. Dr. Klaus Heubeck’s 2005 G biometric tables
(“Richttafeln”) to calculate its obligations under German pension plans. Such tables are widely recognized for
use in the measurement of company pension obligations.
The discount rate assumption reflects the rates available for high-quality fixed income investments during the
period to maturity of the benefit in the respective obligation. A uniform interest rate was used for the Eurozone.
Expected returns on plan assets are calculated according to the allocation of plan assets. For investments in
equity securities, the yield reflects the observable performance in the individual countries and the respective
portfolio. The return on debt securities is derived from quoted prices of such securities. The expected return for real
estate investments depends on the marketability, which is determined by local market conditions and individual
contractual commitments.
The pension obligations of the German Group companies arising from defined benefit plans are largely
unfunded, whereas those of the foreign subsidiaries are predominantly funded.
The defined benefit plans are structured as follows:
December 31,
2010
December 31,
2009
(E thousand)
Defined benefit obligation of unfunded plans ............................ 154,588 149,992
Defined benefit obligation of fully or partly funded defined benefit plans ....... 581,021 465,592
Fair value of plan assets ........................................... (555,460) (450,307)
Unrecognized actuarial gains (+) and losses (�) ......................... (28,953) (13,492)
Unrecognized past service cost ...................................... (35) 2,268
Amounts not recognized due to asset ceiling (IAS 19.58 (b)) . . . ............. — 1,173
Fair value of the reimbursement rights. ................................ (4,420) (4,397)
Net amount recognized ........................................... 146,741 150,829
Thereof:
— Other assets in connection with pension obligations *)
................... 27,701 23,769
— Provisions for pensions and similar obligations ........................ 174,442 174,598
*) Also includes reimbursement rights recognized as assets.
The reconciliation of the defined benefit obligation is as follows:
2010 2009
(E thousand)
Defined benefit obligation as of January 1 ................................. 615,584 564,975
Service cost. ......................................................... 14,200 12,686
Interest cost. ......................................................... 28,857 27,055
Employee contributions ................................................. 12,667 18,098
Actuarial gains and losses ............................................... 30,933 25,137
Benefits paid ......................................................... (33,961) (31,412)
Past service cost ...................................................... 2,330 533
Curtailments and settlements ............................................. (493) (1,009)
Change in scope of consolidation/other transfers. .............................. 5,690 (2,723)
Foreign currency exchange rate differences .................................. 59,802 2,244
Defined benefit obligation as of December 31 ............................... 735,609 615,584
F-44

The fair values of the plan assets developed as follows:
2010 2009
(E thousand)
Fair value of plan assets as of January 1. .................................. 450,307 398,319
Expected return ....................................................... 23,602 20,366
Employee contributions ................................................. 12,667 18,098
Employer contributions ................................................. 12,840 11,941
Actuarial gains and losses ............................................... 15,047 18,953
Benefits paid ......................................................... (23,769) (21,576)
Change in scope of consolidation/other transfers. .............................. 5,334 2,201
Foreign currency exchange rate differences .................................. 59,432 2,005
Fair value of plan assets as of December 31 ................................ 555,460 450,307
The current allocation of plan assets is as follows:
December 31,
2010
December 31,
2009
(E thousand)
Shares ........................................................ 205,750 152,376
Bonds ........................................................ 182,964 156,682
Other assets .................................................... 42,630 40,844
Real estate ..................................................... 124,116 100,405
555,460 450,307
Plan assets do not comprise financial instruments issued by the plan sponsor; own-used real estate and other
assets used by the Company amounted to A16,094 thousand (2009: A11,768 thousand).
Changes in reimbursement rights were as follows:
2010 2009
(E thousand)
Reimbursement rights as of January 1 ........................................ 4,397 4,429
Expected return .......................................................... 190 201
Actuarial gains and losses ................................................... 84 66
Benefits paid ............................................................ (299) (299)
Changes in the scope of consolidation .......................................... 48 —
Reimbursement rights as of December 31 ..................................... 4,420 4,397
Reimbursement rights recognized contain life insurance policies and claims arising from other insurances
concluded to cover the relevant pension obligations.
net:
Pension expenses consist of personnel expenses and interest expenses which are included in interest income,
2010 2009
(E thousand)
Service cost .......................................................... (14,200) (12,686)
Interest cost for funded plans ............................................. (21,313) (18,523)
Expected return on plan assets ............................................ 23,602 20,366
Expected return on reimbursement rights ..................................... 190 201
Amortization of actuarial gains and losses .................................... (2,530) (2,889)
Past service cost ....................................................... 27 (206)
Curtailments and settlements .............................................. 435 1,018
Effects of limitation of asset ceiling as per IAS 19.58(b) ......................... 1,173 334
Interest cost for unfunded plans. ........................................... (7,544) (8,532)
Net periodic benefit expense for defined benefit plans ......................... (20,160) (20,917)
F-45

The actual gain on plan assets amounted to A38,649 thousand in 2010 (2009: A39,319 thousand). The actual
return on reimbursement rights totaled A274 thousand (2009: A267 thousand).
The funded status of defined benefit plans is as follows:
2010 2009 2008 *)
2007 2006
Defined benefit obligation ..................... 735,609 615,584
(E thousand)
564,975 558,529 607,487
Fair value of plan assets. ...................... 555,460 450,307 398,319 464,622 434,395
Funded status .............................. 180,149 165,277 166,656 93,907 173,092
*) Comparative amounts restated due to the initial application of IFRIC 14.
Experience adjustments to the present value of pension rights and the fair values of plan assets were as follows:
2010 2009 2008 *)
(E thousand)
Defined benefit obligation ................................. 2,760 8,871 (3,585) 2,428
Fair value of plan assets .................................. 15,047 18,953 (98,363) 20,022
*) Comparative amounts restated due to the initial application of IFRIC 14.
The employers’ contributions to the plan assets for 2011 are expected to be A13,137 thousand.
(24) Other provisions
The provisions developed as follows:
As of
January 1,
2010 Additions Accretion Utilization Reversals
Other
changes *)
2007
As of
December 31,
2010
Other taxes ................
Personnel-related obligations
2,451 650 —
(E thousand)
(723) (1) (77) 2,300
— early retirement schemes. . . . 6,203 2,852 47 (2,910) (309) (1,267) 4,616
— anniversary payments ...... 9,730 277 45 (262) (21) 578 10,347
— other .................. 68 24 — (50) (18) — 24
Onerous contracts ........... 4,915 4,059 — (3,396) (6) 1,056 6,628
Restructuring expenses ....... 10,627 1,703 — (8,035) (66) 19 4,248
KDI antitrust case ........... 13,500 — — (13,500) — — —
Litigation and other risks. ..... 14,434 389 — (846) (1,334) 2,712 15,355
Miscellaneous provisions ...... 16,702 5,559 120 (3,532) (1,822) 3,370 20,397
Other accrued liabilities
78,630 15,513 212 (33,254) (3,577) 6,391 63,915
Personnel-related obligations . . . 36,132 37,428 — (26,753) (1,253) 4,131 49,685
Outstanding invoices .........
Miscellaneous accrued
26,097 28,210 — (31,450) (1,295) 2,920 24,482
liabilities ................ 296 372 — (98) — 120 690
62,525 66,010 — (58,301) (2,548) 7,171 74,857
Other provisions ........... 141,155 81,523 212 (91,555) (6,125) 13,562 138,772
*) Change in scope of consolidation, foreign currency adjustments, reclassification and transfers to/from third parties.
F-46

Reconciliation to balance sheet amounts:
December 31, 2010 December 31, 2009
Non-current Current Non-current Current
Other taxes ........................................
Personnel-related obligations
—
(E thousand)
2,300 — 2,451
—early retirement schemes ............................ 4,463 153 4,538 1,665
—anniversary payments .............................. 10,347 — 9,547 183
—other . . . ........................................ — 24 — 68
Onerous contracts ................................... 732 5,896 865 4,050
Restructuring expenses ............................... 1,169 3,079 — 10,627
KDI antitrust case ................................... — — — 13,500
Litigation and other risks. ............................. 9,728 5,627 9,903 4,531
Miscellaneous provisions. ............................. 5,074 15,323 6,434 10,268
Other accrued liabilities
31,513 32,402 31,287 47,343
Personnel-related obligations ........................... — 49,685 — 36,132
Outstanding invoices ................................. — 24,482 — 26,097
Miscellaneous accrued liabilities ........................ — 690 — 296
— 74,857 — 62,525
Other provisions ................................... 31,513 107,259 31,287 109,868
The provision for KDI antitrust case was fully utilized in 2010.
The provision for onerous contracts is based on procurement and sale contracts for goods and other contractual
obligations.
The provisions for restructuring relate to obligations in respect of termination benefits granted in redundancy
programs and other restructuring expenses.
Miscellaneous provisions include an amount of A1,607 thousand (2009: A1,740 thousand) for compensation
payments to former employees of a subsidiary acquired in 2000 due to the insolvency of the relevant insurance
company. Furthermore, provisions for environmental remediation including decontamination and other risks are
included under this caption.
Accrued liabilities for employee-related obligations include bonus payments of A34,627 thousand (2009:
A22,681 thousand) and accrued vacation and accrued overtime of A13,426 thousand (2009: A12,035 thousand).
(25) Financial liabilities
The details of financial liabilities are as follows:
December 31, 2010 December 31, 2009
up to
1 year 1-5 years
Over
five years Total
up to
1 year 1-5 years
Over
five years Total
(E thousand)
Bonds ............... 5,511 527,774 — 533,285 5,396 360,910 — 366,306
Liabilities to banks ...... 29,874 248,883 7,628 286,385 44,517 230,613 — 275,130
Promissory notes .......
Liabilities under ABS
2,061 144,396 — 146,457 — — — —
programs ........... 72 87,159 — 87,231 65 20,659 — 20,724
Finance lease liabilities . . 2,060 4,742 — 6,802 2,191 6,176 386 8,753
39,578 1,012,954 7,628 1,060,160 52,169 618,358 386 670,913
Of the above financial liabilities an amount of A30,498 thousand (2009: A24,710 thousand) is secured by
mortgages. Furthermore, inventories listed in Note 16 Inventories serve as collateral as well as trade receivables
under the ABS programs.
F-47

Transaction costs that are directly attributable to the issue of financial liabilities in the amount of A11,669
thousand (2009: A5,977 thousand) were offset against the respective liabilities.
Bonds
Klöckner & Co issued in 2007, 2009 and 2010 the following convertible bonds. Obligor under the bonds is
Klöckner & Co Financial Services S.A., a wholly owned Luxembourg subsidiary. Payments under the bond are
guaranteed by Klöckner & Co SE. The bonds are convertible into existing or new shares of Klöckner & Co SE.
Convertible bond 2010
With closing on December 22, 2010 Klöckner & Co issued a senior unsecured convertible bond with a volume
of A186.2 million to institutional investors outside of the US only. Klöckner & Co intends to use the issue proceeds
to finance the external expansion strategy “Klöckner & Co 2020” and for general corporate purposes.
The bond has a maturity of seven years. The coupon of the bond was fixed at 2.50% per annum. Holders of the
bond are entitled to require early redemption after five years at the principal amount plus accrued interest. Klöckner
cannot call the bond within the first five years. After five years Klöckner & Co may call the bond if the Klöckner
share price (over a certain period) exceeds 130% of the then prevailing conversion price. The conversion price was
set at A28.00, which represents a premium of 35.07% above the reference price of A20.73.
For accounting purposes the bond was bifurcated into an equity and a liability component. The equity
component, net of issuance costs of A0.6 million and deferred taxes of A0.2 million, amounted to A34.8 million and
was credited to capital reserves.
Convertible bond 2009
In June 2009 Klöckner & Co issued a senior unsecured convertible bond with a nominal value of A97.9 million
with an original maturity of five years and a coupon of 6.0% per annum. The conversion price amounts to A18.37.
The bond cannot be called by the issuer for the first three years, and is callable thereafter when Klöckner & Co’s
share price (over a certain period) exceeds 130% of the conversion price.
Convertible bond 2007
In July 2007, the Company issued a not subordinated unsecured convertible bond with an aggregated nominal
value of A325 million with an original maturity of five years and a coupon of 1.5% per annum. The conversion price
is A70.44. Klöckner & Co is entitled to call the bond if Klöckner & Co’s share price (over a certain period) exceeds
130% of the conversion price.
Liabilities due to banks
The syndicated loan due in May 2011 was modified and its volume was increased from A300 million to
A500 million. The agreement was signed on May 28, 2010 and came into effect on June 7, 2010. The credit facility is
provided by 13 banks and has a maturity of three years with a one-year extension possibility.
The balance-sheet-oriented financial covenant concept introduced in 2009 was maintained. Under the terms
gearing (i.e. net financial debt divided by equity attributable to shareholders of Klöckner & Co SE less goodwill
from business combinations subsequent to May 28, 2010) may not exceed 150% and the equity attributable to
shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 28, 2010 may not
decrease below A500 million. Violation of such financial covenants would not automatically result in an event of
default but would require repayment of all outstanding amounts. Subsequent drawings would then be available
when the covenants are again met. Throughout the fiscal year 2010 the group consistently complied with all
covenants.
Further liabilities due to banks exclusively comprise of bilateral borrowings of country organizations, which
are primarily used to finance working capital.
Promissory notes
In the second quarter of 2010, Klöckner & Co issued promissory notes of A145 million based on a simple
standard documentation under the same balance-sheet-related financial covenants as the syndicated loan. The
maturity varies between three and five years. Of the total volume, A39 million are fixed coupon instruments and
A106 million bear variable interest rates.
F-48

Liabilities under ABS programs
Since July 2005, the Klöckner & Co Group has conducted a European ABS program. With effect of April 1,
2010 the program was modified and a term of two years was agreed, and a term of two years negotiated. The
program volume of A420 million remained unchanged. The European ABS program is also based on balance-sheetrelated
covenants. The US ABS program has a maximum volume of USD 125 million (A94 million).
As of the end of the reporting period, utilization of the programs of A88 million including interest breaks down
as follows:
December 31, December 31,
2010
2009
(E million)
European program
— utilization ................................................... 20 —
— maximum volume .............................................
American program
420 420
— utilization (at closing exchange rate) ................................ 68 21
— maximum volume (at closing rate) ................................. 94 87
The utilization of the programs is recognized as loans given that the requirements for derecognition under IAS
39 of the receivables transferred were not met.
Liabilities under finance leases
Liabilities under finance leases have the following terms:
December 31,
2010
December 31,
2009
(E thousand)
Due within one year .............................................. 2,199 2,396
Due between one and five years ..................................... 5,008 6,464
Due after five years .............................................. — 390
Future minimum lease payments ................................... 7,207 9,250
Due within one year .............................................. 139 205
Due between one and five years ..................................... 266 288
Due after five years .............................................. — 4
Interest included in future minimum lease payments .................... 405 497
Due within one year .............................................. 2,060 2,191
Due between one and five years ..................................... 4,742 6,176
Due after five years .............................................. — 386
Total present value of future minimum lease payments .................. 6,802 8,753
(26) Trade payables
December 31,
2010
December 31,
2009
Advance payments received ........................................
(E thousand)
3,722 1,077
Trade payables .................................................. 579,053 375,778
Bills payable ................................................... 1,839 21,532
Trade payables ................................................. 584,614 398,387
F-49

(27) Other liabilities
December 31, 2010 December 31, 2009
Non-current Current Non-current Current
Liabilities due to entities in which participations are held. .... —
(E thousand)
— — 431
Social security contributions .......................... 285 11,662 — 8,724
Customers with credit balances ........................ — 10,356 — 10,934
Liabilities to employees ............................. — 5,719 — 2,447
Value-added tax liabilities ............................ — 24,532 — 11,487
Other tax liabilities ................................. — 5,734 — 5,266
Contingent consideration for business combinations ......... — — 1,817 —
Negative fair value of derivative financial instruments ....... 50,147 3,819 28,663 1,213
Miscellaneous other liabilities ......................... 4,513 14,298 600 11,148
Other liabilities ................................... 54,945 76,120 31,080 51,650
Negative fair values of derivative financial instruments of A51,965 thousand (2009: A24,765 thousand) are
attributable to cross currency swaps and interest rate swaps designated as cash flow hedges for which fair value
changes to the extent attributable to the effective portion of the hedging relationship are directly recognized in
equity and thus do not effect net income.
Other information
(28) Information on capital management
The Group determines the amount of its capital in relation to risk. The capital structure is managed and, if
necessary, adjusted in line with changes in the economic environment. Options for maintaining or adjusting the
capital structure include adjusting dividend payments, capital repayments to shareholders, issuing new shares and
the sale of assets to reduce liabilities.
The capital management is based on gearing. Gearing is calculated as the ratio of net financial debt to equity
attributable to shareholders of Klöckner & Co SE as stated in the statement of financial position less goodwill from
business combinations subsequent to May 28, 2010. Net financial debt is calculated as the difference between
financial liabilities (adjusted for transaction costs) and cash and cash equivalents reported on the statement of
financial position. The Group’s target is to maintain a gearing below 150% in order to be able to obtain finance at
reasonable conditions.
Gearing — based on consolidated equity attributable to shareholders of Klöckner & Co SE — is calculated as
follows:
December 31,
2010
December 31,
2009 Variance
(E thousand)
Financial liabilities ...................................... 1,060,160 670,913 389,247
Transaction cost ........................................ 11,669 5,977 5,692
Liquid funds .......................................... (934,955) (826,517) (108,438)
Net financial debt (before deduction of transaction cost) ........ 136,874 (149,627) 286,501
Consolidated shareholders’ equity ........................... 1,290,494 1,123,263 167,231
Non-controlling interests ................................. (15,118) (15,068) (50)
Goodwill from business combinations subsequent to May 28, 2010 . . (4,623) — (4,623)
Adjusted shareholders equity . . ............................ 1,270,753 1,108,195 162,558
Gearing .............................................. 11% (14)%
The variance of the gearing ratio results primarily from the increased net working capital and cash outflows
under the reestablished strategy of external growth.
F-50

(29) Additional information for financial instruments
The carrying amounts and fair values by category of financial instruments are as follows:
Financial assets as of December 31, 2010 Fair value
At fair
value through
profit or Available
loss for sale *)
IAS 39 measurement categories
Loans and
receivables
(E thousand)
Not covered
by the scope
of IFRS 7
Total
carrying
amount as of
Dec. 31, 2010
Non-current financial assets
Financial assets ............. 2,721 — 2,431 290 — 2,721
Other assets ................
Current financial assets
4,325 1,471 — 2,854 27,702 32,027
Trade receivables ............ 703,101 — — 703,101 — 703,101
Other assets ................ 55,242 779 — 54,463 7,656 62,898
Liquid funds ............... 934,955 — 154 934,801 — 934,955
Assets held for sale .......... — — — — 1,088 1,088
1,700,344 2,250 2,585 1,695,509 36,446 1,736,790
*) Including securities which are pledged to employees to secure early retirement obligations.
Financial liabilities as of
December 31, 2010 Fair value
IAS 39 measurement
categories
At fair
value through Other
profit or loss liabilities
Carrying
amount
under IAS 17
(E thousand)
Not covered
by the scope
of IFRS 7
Total
carrying
amount as of
Dec. 31, 2010
Non-current financial liabilities
Financial liabilities ........ 1,114,526 — 1,015,840 4,742 — 1,020,582
Other liabilities ...........
Current financial liabilities
54,660 377 54,283 — 285 54,945
Financial liabilities ........ 39,578 — 37,518 2,060 — 39,578
Trade payables ........... 584,614 — 584,614 — — 584,614
Other liabilities ........... 32,302 1,624 30,678 — 43,818 76,120
1,825,680 2,001 1,722,933 6,802 44,103 1,775,839
Financial assets as of
December 31, 2009 Fair value
IAS 39 measurement categories
At fair
value through Available Loans and
profit or loss for sale receivables
(E thousand)
Not covered
by the scope
of IFRS 7
Total
carrying
amount as of
Dec. 31, 2009
Non-current financial assets
Financial assets ......... 482 — 194 288 1,894 2,376
Other assets ...........
Current financial assets
2,960 877 — 2,083 23,776 26,736
Trade receivables ....... 464,266 — — 464,266 — 464,266
Other assets ........... 58,552 820 — 57,732 7,288 65,840
Liquid funds ........... 826,517 — 121 826,396 — 826,517
Assets held for sale ...... — — — — 1,081 1,081
1,352,777 1,697 315 1,350,765 34,039 1,386,816
F-51

Financial liabilities as of
December 31, 2009 Fair value
IAS 39 measurement
categories
At fair
value through Other
profit or loss liabilities
(E thousand)
Carrying
amount
under IAS 17
Not covered
by the scope
of IFRS 7
Total
carrying
amount as of
Dec. 31, 2009
Non-current financial
liabilities
Financial liabilities . . . 653,647 — 612,182 6,562 — 618,744
Other liabilities ......
Current financial
liabilities
31,080 3,898 27,182 — — 31,080
Financial liabilities . . . 52,169 — 49,978 2,191 — 52,169
Trade payables ...... 398,387 — 398,387 — — 398,387
Other liabilities ...... 26,172 1,213 24,959 — 25,478 51,650
1,161,455 5,111 1,112,688 8,753 25,478 1,152,030
The fair values of current financial assets are largely identical to their carrying amounts. The fair values of
financial liabilities reflect the current market environment as of December 31, 2010 for the respective financial
instruments. The fair value is not reduced by transaction costs. For current financial liabilities for which no
transaction costs are to be considered, the carrying amount approximates fair value.
Fair values by fair value hierarchy levels
Fair value measurement at the end of the reporting
period by hierarchy:
December 31,
2010 Level 1 Level 2 Level 3
(E thousand)
Financial assets measured at fair value (derivative financial
instruments)
Not designated in hedge accounting . . . .................. 2,250 — 2,250 —
Total ............................................ 2,250 — 2,250 —
Financial liabilities measured at fair value (derivative financial
instruments)
Not designated in hedge accounting . . . .................. 2,001 — 2,001 —
Designated in hedge accounting ........................ 51,965 — 51,965 —
Total. ............................................. 53,966 — 53,966 —
Fair value measurement at the end of the reporting
period by hierarchy:
December 31,
2009 Level 1 Level 2 Level 3
(E thousand)
Financial assets measured at fair value (derivative financial
instruments)
Not designated in hedge accounting ...................... 1,697 — 1,697 —
Total ............................................ 1,697 — 1,697 —
Financial liabilities measured at fair value (derivative financial
instruments)
Not designated in hedge accounting ...................... 5,111 — 5,111 —
Designated in hedge accounting. ........................ 24,765 — 24,765 —
Total .............................................. 29,876 — 29,876 —
Financial instruments for which the fair value is obtained from quoted prices for similar instruments are
classified as Level 1. If fair values are derived from directly observable market inputs, those instruments are
included in Level 2. Financial instruments for which the fair values are not based on observable market data are
assigned to Level 3. Klöckner & Co only holds Level 2 financial instruments.
F-52

Net income by measurement categories
Cash and cash equivalents, trade receivables and other receivables predominantly are of short-term maturity.
Therefore, the carrying amounts at the reporting date closely approximate fair values.
Net income for the measurement category loans and receivables consists of foreign currency exchange gains
and losses, impairments and write-offs, recoveries on impaired receivables and compensation by and fees for credit
insurance. In financial year 2010, a net loss of A20,687 thousand (2009: A18,291 thousand) was incurred.
Net income for other liabilities consists of foreign currency exchange gains and losses. In financial year 2010, a
net gain of A2,388 thousand (2009: net loss A2,038 thousand) was incurred.
As a result of impairments of non-current securities there were no impairment losses in 2010 for financial
assets. The impairment loss for trade receivables amounted to A6,237 thousand (2009: A10,820 thousand) in 2010.
Credit risks
The Company’s exposure to credit risks mainly arises from its operating business. A credit risk is defined as an
unexpected loss of financial assets, e.g. if a customer is unable to meet its obligations within the appropriate period.
Throughout the operating business, receivables are locally monitored on an ongoing basis. Valuation allowances are
recorded to reflect credit risks.
The maximum exposure to credit risk is reflected by the carrying amounts of the financial assets reported in the
statement of financial position. The Group counters the credit risk with its own credit management and with credit
insurance. In 2010 approximately 64% (2009: 61%) of the trade receivables were covered by credit insurance.
(30) Derivative financial instruments
Derivative financial instruments are accounted for at fair value in compliance with IAS 39.
In operating its business the Group is exposed to interest and currency risks. Such risks are hedged using
derivative financial instruments.
The Group only uses standard instruments for which sufficient liquid markets exist. Derivative financial
instruments are entered into and managed in compliance with internal directives that govern the scope of action,
responsibilities and control systems. According to these directives, the use of derivative financial instruments is a
key task of the Corporate Finance department of Klöckner & Co SE, which manages and coordinates such use. The
transactions are concluded exclusively with counterparts with first-class credit ratings. Derivative financial
instruments cannot be used for speculative purposes, but exclusively for hedging risks associated with underlying
transactions.
IFRS 7 requires an entity to provide disclosure that enables users of financial statements to evaluate the nature
and the extent of risks arising from financial instruments. These risks encompass among others credit risk, market
risk and liquidity risk.
Information with regard to credit risk is provided in Note 29 Additional information for financial instruments.
Information on interest rate risk
The Group is exposed to interest rate changes due to the use of financial instruments. The hedging policy is
designed to cover interest rate changes of variable interest rate bearing financial liabilities. The Group is facing
interest rate exposure with regard to its central financing instruments in the Eurozone as well as to bilateral lines of
credit of its US and Swiss subsidiaries. In addition interest rate risks relate to the short-term deposits of liquid funds
at banks. The central finance department monitors and controls the exposure of financial liabilities by using
derivative interest rate financial instruments.
Long-term financing needs in the Eurozone are primarily refinanced by capital market instruments such as
convertible bonds with fixed coupons. Under the Group’s hedging policy variable interest bearing loans used for
long-term financing are synthetically converted to fixed rate using interest rate swaps. Due to their term and volume
these instruments qualify for cash flow hedge accounting.
Changes in interest levels will have an impact on the reserve for fair value adjustments of financial instruments
included in equity, and are therefore separately recognized in the sensitivity analysis.
Under consideration of the convertible bonds and the fixed rate bilateral credit arrangements as of
December 31, 2010, approximately 60% of the financial indebtedness before transaction costs was of a fixed
F-53

ate nature. If hedging instruments are incorporated in the analysis, the amount of a fixed interest debt included in
the financial indebtedness before deduction of transaction costs amounts to approximately 82%.
Due to the measures implemented for liquidity protection a significant liquidity reserve was built up by shortterm
deposits at banks with first-class credit ratings. If interest rates increase the temporary liquidity reserves would
lead to improved interest income.
Under IFRS 7 interest rate risk and chances are assessed using sensitivity analyses in which the impact of
interest rate changes on interest income and expense and equity as of the end of the reporting period is assessed.
Interest rate risk is measured as cash flow risk.
The Group assesses equity and income statement effects under parallel shifting of the Euro and US Dollar yield
curves. The cash flow impact from the parallel shifting only refers to interest income and interest expense in the
following reporting period.
If US Dollar/Euro interest rate levels as of December 31, 2010 had been higher by 100 basis points the financial
result driven from financial liabilities and hedging instruments for the following year would have been impacted
negatively by A2.1 million. With a view to the liquidity reserve an investment period of one year would result in a
positive effect of A8.7 million.
At a US Dollar/Euro interest rate increase of 100 basis points the value of derivative financial instruments
designated as cash flow hedges would have been positively increased by A7.0 million, which would have been
reflected in equity in the reserve for fair value adjustments of financial instruments.
Information on foreign currency exchange risk
The Group is exposed to foreign currency exchange risk resulting from financing activity, Group internal
dividend payments and acquisitions of subsidiaries as well as from operating activity. The Group’s hedging policy is
focused on cash-flow-related exposures. Solely translation-related risks, which result from the conversion of assets
and liabilities, are not hedged.
The Group operates a central foreign currency exchange management. Foreign and domestic subsidiaries are
required to identify foreign currency exposure and to communicate the exposure to the central finance department,
or within certain thresholds, hedge the exposure with financial institutions. The hedging transactions cover the
exposure from actual and forecasted transactions. With regard to forecasted transactions compensating effects
resulting from operating measures or market developments — so-called natural hedging — are taken into
consideration when defining the hedging strategy.
As of the end of the reporting period no material foreign currency exchange risks from the operating business
or acquisitions were identified.
Financing activity foreign exchange risk is the risk that results from foreign currency loans of the holding
companies. As part of the central Group financing these loans denominated in Pounds Sterling and US Dollars were
granted to subsidiaries and were fully hedged.
Due to the volume and long-term nature of two US Dollar financing arrangements both the principal and the
interest payments were hedged using cross currency swaps, designated as cash flow hedge.
Loans granted in Pounds Sterling were hedged including interest payments via forward contracts and foreign
currency swaps.
The impact of changes of foreign currency rates on foreign exchange gains and losses as well as on the Group’s
equity as of the balance sheet date is monitored by a sensitivity analysis. The exposure is assessed as cash flow risk
for the following year.
The sensitivity analysis identifies compensating income effects of forward exchange contracts and swaps,
since their maturity is consistent to the maturity of the underlying transaction.
Cross currency swaps designated as cash flow hedge may result in changes in the reserves for fair values of
financial instruments included in equity. Increases or decreases in the US Dollar to Euro exchange rate would, if
assessed in isolation, lead to changes of such reserves. However, compensating changes in the value of the
underlying transaction would also be recorded in equity, because the underlying transaction is a net investment in a
foreign subsidiary.
F-54

Information on liquidity risk
The demand for liquidity is constantly monitored by the Corporate Finance department to ensure appropriate
levels of liquidity. In 2010 the financing structure was further optimized. By first-time issuing promissory notes of
A145 million in the second quarter the financial headroom was extended and the financing portfolio was further
diversified. The maturity of the European ABS program was increased to two years. The syndicated loan now has a
maturity of three years and an allowance for a one-year extension. Simultaneously, the volume was increased by
A200 million to A500 million. The contractual arrangements were further harmonized. The covenant concept
introduced during the financial crisis was maintained.
To facilitate the new growth strategy a further convertible bond was issued in December 2010. The convertible
bond has a volume of A186.2 million at a maturity of seven years. Due to an investor put option the convertible bond
is disclosed as a five-year bond in the IFRS consolidated financial statements.
Liquid funds are invested as short-term deposits with the Group’s core banks. The solvency of these financial
institutions is monitored on a regular basis.
Including the convertible bonds with nominal amounts of A609 million (2009: A423 million) and finance
leasing of approximately A7 million (2009: A9 million) the Group has facilities of approximately A2.2 billion (2009:
A1.7 billion). Financial liabilities before deduction of transaction costs amounted to A1.072 million as of
December 31, 2010, (2009: A677 million) which represent 48% (2009: 41%) of the credit facilities. This amount
includes among bilateral credit facilities also the convertible bonds and drawings under the syndicated loan, for
which hedge accounting is applied in accordance with IAS 39.
The following table illustrates the contractual undiscounted interest and principal payments of the nonderivative
and derivative financial instruments for the periods indicated.
December 31, 2010
Cash outflows
Less than
More than
one year 1-5 years 5 years Total
(E thousand)
Bonds ............................ Nominal
values — 609,100 — 609,100
Interest 15,404 41,143 — 56,547
Total 15,404 650,243 — 665,647
Promissory notes .................... Nominal
values — 145,000 — 145,000
Interest 6,587 18,502 — 25,089
Total 6,587 163,502 170,089
Bank loans ........................ Nominal
values 28,836 254,476 7,628 290,940
Interest 8,173 15,441 205 23,819
Total 37,009 269,917 7,833 314,759
ABS............................. Nominal
values — 88,175 — 88,175
Interest 1,014 814 — 1,828
Total 1,014 88,989 — 90,003
Finance lease liabilities ............... Nominal
values 2,060 4,742 — 6,802
Interest 139 266 — 405
Total 2,199 5,008 — 7,207
Total financial liabilities. .......................... 62,213 1,177,659 7,833 1,247,705
Cash outflows from derivative financial instruments
designated in interest hedging relationships ............ 7,730 12,860 (10) 20,580
F-55

December 31, 2009
Cash outflows
Less than
one year 1-5 years
More than
5 years Total
(E thousand)
Bonds ............................ Nominal values — 422,900 — 422,900
Interest 10,749 33,259 — 44,008
Total 10,749 456,159 — 466,908
Bank loans ........................ Nominal values 44,517 233,426 — 277,943
Interest 5,777 5,230 — 11,007
Total 50,294 238,656 — 288,950
ABS............................. Nominal values — 20,826 — 20,826
Interest 170 246 — 416
Total 170 21,072 — 21,242
Finance lease liabilities ............... Nominal values 2,191 6,176 386 8,753
Interest 205 288 4 497
Total 2,396 6,464 390 9,250
Total financial liabilities ............................. 63,609 722,351 390 786,350
Cash outflows from derivative financial instruments designated
in interest hedging relationships ....................... 9,492 12,036 — 21,528
Included are all financial instruments for which payments have already been fixed as of the end of the reporting
period; expected payments on future obligations not yet incurred have not been included. Variable interest payments
on financial instruments were determined on the interest rate fixed as of the end of the reporting period. For the use
of the revolving credit facility it was assumed that the level of drawings will be maintained until expiration of the
facility.
The nominal and fair values of the derivative financial instruments used to hedge interest and foreign exchange
exposures are as follows:
December 31, 2010 December 31, 2009
Not designated in
hedge accounting
Designated in hedge
accounting
Not designated in
hedge accounting
Designated in hedge
accounting
(E million)
Nominal values
Forward exchange transactions . . . 88.4 — 64.1 —
Interest rate swaps ............ 8.1 671.1 — 831.1
Other interest rate hedging
instruments . . . ............ 15.0 — 34.7 —
Cross currency swap .......... — 223.7 — 223.7
Fair values
Forward exchange transactions . . . 0.6 — (0.8) —
Interest rate swaps ............ (0.4) (18.7) — (17.9)
Other interest rate hedging
instruments . . . ............ — — (1.6) —
Cross currency swap .......... — (33.3) — (6.9)
Hedging VOP . . . ............ — — (1.0) —
The nominal values correspond to the gross amounts of the currency and interest rate portfolio. 322,571 (2009:
588,952) options are used to hedge the exposure resulting from the Group’s virtual stock option programs. The fair
values of these instruments are close to zero (2009: A �1.0 million).
The fair values of the derivative financial instruments are determined on the basis of banks’ quoted market
prices or on financial formulae based on models commonly used by banks. If fair values exist they correspond to the
amount third parties would pay for the rights or obligations arising from the financial instruments. The fair values
are the market values of the derivative financial instruments, irrespective of any offsetting changes in value in the
underlying transactions.
F-56

Forward exchange transactions with a nominal amount of A88.4 million (2009: A64.1 million) have a
remaining term of less than one year. To hedge its foreign currency exposure of long-term inter-group financing
Klöckner & Co Verwaltung GmbH entered into cross currency swaps maturing in May 2013 and December 2014,
respectively. With regard to the financing volume of USD 335 million the principal swap at the beginning and the
end of the term as well as semi-annual or quarterly interest payments the interest rate was fixed at the inception of
the swap agreement. Due to its duration and volume the cross currency swap qualifies as cash flow hedge under IAS
39.
The interest rate swaps designated in a hedging relationship relate to forward interest rate swaps and on an
interest rate swap on a volume of A223.7 million and a swap interest rate between 4.40% and 4.60%. The total term
of these transactions covers a period of up to seven years. The interest rate swaps are used to hedge existing and
future variable Euro interest rate debt of the holding companies which relates to refinancing of non-current assets.
To the extent attributable to the effective portion of the fair value changes of hedging instruments designated in
hedge accounting such fair value changes are recognized directly in equity. For the period ending December 31,
2010 these fair value changes amounted to A�27.2 million (2009: A19.9 million).
The other interest rate hedging instruments with a nominal amount of A23.1 million (2009: A34.7 million) refer
to two interest swaps and one interest cap of BSS. The instruments are used to hedge variable bilateral credits.
(31) Pending litigation, commitments and contingent liabilities
The Group is currently not subject to pending litigation that may have a material effect on the Group’s net
assets and results of operation. Despite the comprehensive set of compliance measures, it can, however, not be ruled
out that isolated violations may arise or that there are yet undetected historic violations.
The liabilities on bills amount to A31 thousand (2009: A1 thousand). In addition, the Group has issued
guarantees in connection with the disposal of subsidiaries. Such guarantees cover customary representations and
warranties as well as environmental and tax contingencies.
In the Klöckner & Co Group, there are other financial obligations arising in particular from agreements that
qualify as non-cancelable operating leases. Operating leases mainly relate to real estate, machinery, vehicles,
telephone systems and computer hardware. In some instances the leases include purchase options.
The future payments to be made under these leases are as follows:
December 31, 2010 December 31, 2009
(E thousand)
Due within one year ....................................... 52,172 49,575
Due between one and five years .............................. 115,252 106,013
Due after five years ........................................ 60,842 56,509
Future minimum lease payments (nominal amounts) ............. 228,266 212,097
There are also other financial obligations arising from the purchase obligation for investments, which
amounted to A2,785 thousand as of December 31, 2010 (2009: A4,495 thousand).
(32) Related party transactions
Within the framework of its ordinary business activities, the Klöckner & Co Group has business relationships
with numerous companies. These also include related parties that were accounted for at cost. Business relations
with these companies do not fundamentally differ from trade relationships with other companies. No material
transactions were conducted with any of these companies in the year under review.
Certain members of the Supervisory Board were or are Members of the Supervisory Board or Management
Board of other entities. Klöckner & Co holds business relations to certain of such entities. Business with such
entities is transacted at arm’s length.
F-57

The compensation model of the Management and Supervisory Board is presented in the compensation report,
which is included in the management report. The compensation of members of the Management Board of
Klöckner & Co SE for their activities in 2010 amounted to:
Gisbert
Rühl,
CEO/CFO
Ulrich
Becker,
COO
(E thousand)
Fixed components ........................................
Bonuses
634 526 1,160 1,412
*)
Current .............................................. 333 240 573 775
Midterm ............................................. 225 180 405 —
Share-based payment **) .................................... — (205) (205) 1,366
Total ................................................. 1,192 741 1,933 3,553
Present value of benefit obligation ............................ 1,618 386 2,004 2,488
Addition in the current reporting period ........................ 740 217 957 667
*) Payout less prior year accrual plus current year accrual.
**) As of the date of legally binding arrangement or date of the modification of the exercise terms.
The amount for share-based payments represents the fair value of the virtual stock options at the grant date or
in case of modifications of the terms and conditions the fair value change at the date of the modification. During
financial year 2010 payments for share-based compensation amounts to A537 thousand (2009: A920 thousand).
Of the 2010 additions to pension provisions an amount of A693 thousand is attributable to a modification of the
defined benefit arrangement of one member of the Management Board. Statutory pension provisions for a former
Management Board member amount to A1,507 thousand.
Business with members of the Management Board is restricted to their above function as members of the
Management Board.
In the 2010 financial year, remuneration for the Supervisory Board amounted to A382 thousand (2009: A339
thousand).
A list of the members of the Management Board and the Supervisory Board is included on pages 8 and 9 of this
annual report.
Also a related party in accordance with IAS 24 is the pension fund of the Debrunner & Acifer Group,
Switzerland. The pension fund leases premises to the Swiss subsidiaries. Rental expenses for such premises amount
to A1,154 thousand (2009: A1,021 thousand).
(33) Supplemental cash flow information
The consolidated statement of cash flows is presented in line with IAS 7 (Cash Flow Statement). The statement
of cash flows is of central importance in assessing the financial position of the Klöckner & Co Group.
The changes in the items of the statement of financial position that provide the basis for the statement of cash
flows cannot be directly reconciled to the statement of financial position due to the effects of currency translation
and changes in the scope of consolidation which are eliminated in compiling the statement of cash flows.
Cash flow from operating activities
Cash flow from operating activities amounted to A35.2 million in the financial year 2010 which is significantly
lower than in the prior year (2009: A564.7 million). This reflects the business model which entails increased working
capital needs in times of increasing demand and, accordingly, negative impacts in cash flows from operating activities.
2010
Total
2009
Total
Variance
2010/2009 2009/2008
(E thousand)
Inventories ......................................................... 168,180 (431,161)
Trade receivables *) ................................................... 136,724 (337,589)
Trade payables ...................................................... (108,157) (581)
Net working capital .................................................. 196,747 (769,331)
F-58

*) Including trade receivables sold under ABS programs.
Net working capital increased net of foreign currency exchange effects, changes in the scope of consolidation
and reclassification to assets held for sale by A196.7 million to A1,017.3 million.
Cash flow from investing activities
Cash outflows for the acquisitions of A164.5 million and capital expenditure for property, plant and equipment
and intangible assets of A27.0 million proceeds from the sale of property, plant and equipment and non-current
assets (A3.7 million) led to net outflows from investing activities to A187.7 million.
Cash flow from financing activities
Cash flow from financing activities is driven by proceeds from the issuance of promissory notes (A144.4 million)
and the convertible bond net of transaction costs (A183.3 million) which are partly offset by repayments of BSS
shareholder loans A57.9 million. Including net drawings of financial liabilities of A28.2 million and (net) interest
payments of A43.3 million cash inflows from financing activities amount to A252.0 million (2009: cash outflow
A23.8 million).
The business activities of the Klöckner & Co Group continuously generate short-term cash and cash
equivalents. As a general rule they are used within one month to repay working capital credits.
Liquid funds
Liquid funds comprise cash and cash equivalents including short-term securities amounting to A935.0 million
as of December 31, 2010. Cash and cash equivalents include bank balances of A24,693 thousand (2009: A13,957
thousand) relating to the consolidated special-purpose entities whose business is conducted exclusively for the
subsidiaries participating in the ABS program.
(34) Segment reporting
Europe North America Headquarters Consolidation Total
2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
(E thousand)
Sales . ..............
— of which with third
4,311,469 3,186,155 886,712 674,338 18,460 18,977 (18,460) (18,977) 5,198,181 3,860,493
parties .............
— of which with other
4,311,469 3,186,155 886,712 674,338 — — — — 5,198,181 3,860,493
segments . . .........
Capital expenditure for
intangible assets,
property, plant and
— — — — 18,460 18,977 (18,460) (18,977) — —
equipment . ......... 23,556 23,124 2,331 626 641 897 — — 26,528 24,647
Segment result (EBITDA). .
Earnings before interest and
222,618 56,593 33,040 (43,574) (17,884) (81,514) — — 237,774 (68,495)
taxes (EBIT) .........
Amortization and
depreciation of intangible
assets and property, plant
161,416 (6,041) 9,753 (68,541) (19,177) (103,551) (1) — 151,991 (178,133)
and equipment . . . ....
Impairment losses for
intangible assets and
property, plant and
61,196 40,050 23,287 24,967 1,299 2,839 1 — 85,783 67,856
equipment . .........
Other non-cash income and
— 22,583 — — — 19,199 — — — 41,782
expenses . . ......... (32) 146,946 — — 868 (66,818) — — 836 80,128
December 31,
2010
Europe North America Headquarters Consolidation Total
December 31,
2009
December 31,
2010
December 31,
2009
December 31,
2010
(E thousand)
December 31,
2009
December 31,
2010
December 31,
2009
December 31,
2010
December 31,
2009
Net working capital . . . 850,827 541,022 158,228 95,909 8,281 (134) (8) — 1,017,328 636,797
Employees at year-end . . 8,187 7,708 1,381 1,216 131 108 — — 9,699 9,032
F-59

The earnings before interest and taxes (EBIT) can be reconciled to the consolidated net income before taxes as
follows:
2010 2009
(E thousand)
Earnings before interest and taxes (EBIT) ................................... 151,991 (178,133)
Financial result (Group) . ............................................... (67,650) (61,699)
Income before taxes (Group) ........................................... 84,341 (239,832)
Reporting of operating segments in accordance with IFRS 8 is based on the internal organization and reporting
structure. Klöckner & Co Group is organized by regions. The internal reporting compiles information at the level of
the reportable segments Europe and North America, which include all entities domiciled in those regions. Central
functions that are not assigned to a segment, as well as the consolidation effects, are reported separately.
The segments use the same accounting policies described in Note 4 Significant accounting policies, except for
effects of intragroup transactions (e.g. profit distributions), which are eliminated within the individual segments.
The external sales comprise all sales generated with customers. Sales between segments are disclosed
separately to allow reconciliation to consolidated sales. Intersegment sales — exclusively deliveries from the
central purchasing entity Klöckner Global Sourcing GmbH, Duisburg — are invoiced at arms’ length exclusively.
EBITDA as key performance indicator is defined as earnings before interest, taxes, depreciation and amortization
and reversals of impairments of intangible assets and property, plant and equipment.
Net working capital comprises inventories and trade receivables less trade liabilities.
As explained in Note 6 Specific items recognized in net income the 2009 impairments of goodwill and property,
plant and equipment relate to CGU Spain and CGU United Kingdom. In the course of the initial consolidation of the
Klöckner & Co Group in 2005 the purchase price allocation, required by IFRS 3, was made centrally and attributed
to the segment Headquarters. Excess fair values for land and buildings were assigned to segment Headquarters due
to internal controlling purposes. As such the respective impairment losses on these fair values relating to the
Spanish property are included in the segment Headquarters.
Non-cash income and expenses mainly relate to changes in fair values of derivative financial instruments.
Prior-year amounts related to the adjustments of the antitrust provision in France (Europe: A145.8 million) and the
corresponding claim against former shareholders (Headquarters: A�66.5 million).
Non-current assets by regions
Intangible assets, property, plant and equipment, investment property and non-current investments and
securities are broken out by regions as follows:
2010 2009
(E thousand)
Germany ............................................................ 144,412 52,610
Switzerland .......................................................... 187,162 150,111
United States. ........................................................ 213,451 200,290
France. ............................................................. 61,593 66,268
Spain .............................................................. 62,079 63,951
Other regions ........................................................ 96,002 101,957
Total .............................................................. 764,699 635,187
(35) Subsequent events
On January 19, 2011 Klöckner & Co SE signed a Memorandum of Understanding to acquire Macsteel Service
Centers USA, Inc. (“Macsteel”) from the seller Macsteel Global B.V.
With its 30 locations, Macsteel is one of the leading service center companies in the US. In 2010, Macsteel
generated with its 1,183 employees sales of approx. USD 1.3 billion. The transaction will be subject to a successful
due diligence, the approval by the Supervisory Board of Klöckner & Co SE and antitrust authorities. The transaction
is expected to be completed in the second quarter of 2011.
F-60

With the planned acquisition of Macsteel, Klöckner & Co SE will expand the product and service portfolio
towards a higher margined service center business and strengthen its market position significantly by at least
doubling its sales in the US.
(36) Fees and services of the auditor of the consolidated financial statements
The following fees were incurred for services performed by the auditor KPMG AG, Wirtschaftsprüfungsgesellschaft,
Düsseldorf, and affiliated companies in the financial year:
2010 2009
(E thousand)
Audit of financial statements ................................................. 1,826 1,848
Other assurance services .................................................... 355 1,987
Tax advisory services ...................................................... 183 137
Other services. ........................................................... 171 197
2,535 4,169
The fees for auditing primarily include the audit of the consolidated IFRS financial statements and audits of the
stand-alone financial statements of the entities included in the consolidated financial statements. Other assurance
services include reviews of interim financial statements and in 2009 fees (incl. insurance) in the context of the rights
issue.
The fees for tax advisory services relate to advice for individual matters and consulting on other national and
international tax issues.
The fees for other services relate mainly to project-related consulting services.
(37) Application of section 264 para. 3 and section 264b HGB
In 2010 the following domestic subsidiaries made use in part of the exemption clause included in Section 264
para. 3 of the German Commercial Code (HGB):
Becker Besitz GmbH, Duisburg
Becker Stahl-Service GmbH, Duisburg
Multi Metal Beteiligungs GmbH, Duisburg
Klöckner & Co International GmbH, Duisburg
Klöckner & Co Verwaltung GmbH, Duisburg
Kloeckner & Co USA Beteiligungs GmbH, Duisburg
Klöckner Global Sourcing GmbH, Duisburg
Umformtechnik Stendal UTS GmbH & Co KG, Stendal
F-61

(38) Declaration of compliance with the german corporate governance code in accordance with
section 161 german stock corporations act (AktG — Aktiengesetz)
On December 15, 2010 the Management Board and Supervisory Board issued the declaration of compliance in
accordance with Section 161 German Stock Corporations Act (AktG) and made it permanently publicly available to
the shareholders on the Klöckner & Co Web site.
Duisburg, February 21, 2011
Klöckner & Co SE
The Management Board
Gisbert Rühl Ulrich Becker
Chairman Member
of the Management Board of the Management Board
F-62

Annex to the notes to the financial statements and notes to the consolidated financial statements of
Klöckner & Co SE
Subsidiary listing according to Sections 285 No. 11/313 para. 2
German Commercial Code (HGB)
No. Entity
Interest
in
percent
Held by
entity
no.
Local
currency
Equity in local
currency
Net income in
local currency
Sales in local
currency
1 Klöckner & Co SE, Duisburg, Germany
I. Consolidated affiliated companies
2 Multi Metal Beteiligungs GmbH, Duisburg, Germany. . . 100.00 1 EUR 257,932,945.30 — 1)
—
3 Klöckner & Co International GmbH, Duisburg,
Germany ............................ 100.00 2 EUR 357,899,443.92 — 1)
—
4 Klöckner & Co Verwaltung GmbH, Duisburg,
Germany ............................ 100.00 3 EUR 259,132,783.19 — 1)
—
5 Klöckner Global Sourcing GmbH, Duisburg,
Germany ............................ 100.00 4 EUR 85,787.86 15,898.80 1) 24,027,962.88
6 Klöckner Stahl- und Metallhandel GmbH, Duisburg,
Germany ............................ 100.00 4 EUR 83,209,014.62 — 1) 929,113,700.85
7 Dobbertin Drahthandel GmbH, Hamburg,
Germany........................ 100.00 6 EUR 39,061.39 5,370.36 —
8 ASD metal services Ltd., Leeds, United
Kingdom ...................... 100.00 81 GBP 2.00 — —
9 Klöckner Stal i Metal Polska Sp. z o.o.,
Poznań, Poland .................. 99.99 6 PLN 9,416,272.37 1,591,210.71 111,165,972.86
0.01 7
10 Klöckner Romania S.R.L., Bucharest,
Romania ...................... 99.87 6 RON 5,435,353.38 (1,110,025.87) 20,753,043.72
0.13 7
11 Edelstahlservice Mágocs
Nemesacélfeldolgozó Kft, Mágocs,
Hungary ...................... 100.00 6 HUF 68,062,430.00 8,426,754.00 286,581,085.00
12 Klöckner Stahlhandel CZ, s.r.o., Prague,
Czech Republic .................. 100.00 6 CZK 34,593,753.76 8,065,615.76 427,926,622.37
13 Klöckner Metalsnab AD, Sofia, Bulgaria . . . 99.77 4 BGN 8,301,572.31 (4,169,165.39) 43,490,842.94
14 Klöckner Participaciones SA, Madrid,
Spain . ....................... 100.00 4 EUR (2,240,088.02) (2,312,829.18) —
15 Klöckner Stahl und Metall Ges.m.b.H,
Vienna, Austria .................. 100.00 6 EUR 1,619,877.95 1,358,421.29 —
16 Klöckner & Co Financial Services S.A.,
Luxembourg . . .................. 100.00 1 EUR 216,751.46 162,046.46 —
17 Klöckner S.à r.l., Luxembourg . . . ........ 100.00 3 EUR 12,500.00 — —
18 Klöckner Investment SCA, Luxembourg . . . 96.77 3 EUR 241,569.06 827,193.55 —
3.23 17
19 Klöckner & Co Financial Services B.V.,
Rotterdam, The Netherlands . . . ........ 100.00 20 EUR 19,341,118.42 89,066.03 —
20 Klöckner Netherlands Holding B.V., Barendrecht,
The Netherlands . . .................. 100.00 4 EUR 111,187,970.77 363,421.02 —
21 Buysmetal N.V., Harelbeke, Belgium. ........ 99.99 68 EUR 16,562,572.18 1,961,352.43 47,131,914.33
0.01 72
22 Metall- und Service-Center Ges.m.b.H. Nfg.
KG, Vienna, Austria . . . ............. 51.0015 EUR 9,248,972.08 4,511,801.52 69,449,861.02
23 Klöckner Namasco Holding Corporation,
Wilmington, Delaware, USA . ........ 100.00 31 USD 296,086,638.47 34,519,999.96 —
24 Klöckner Metal Services Ltd., Leeds,
United Kingdom . . ............. 100.00 25 GBP 11,737,857.00 2,184,158.00 65,407,589.72
25 Klöckner UK France Holding Ltd.,
Leeds, United Kingdom . ........ 100.00 4 GBP 30,135,774.00 (3,164,458.00) —
1) Profit and loss transfer agreement.
F-63

No. Entity
Interest
in
percent
Held by
entity
no.
Local
currency
Equity in local
currency
Net income in
local currency
Sales in local
currency
26 Namasco Corporation, Wilmington,
Delaware, USA ............. 100.00 23 USD 378,616,431.64 8,351,219.43 737,043,895.39
27 Lake Steel Ltd., Amarillo, Texas,
USA.................... 100.00 26 USD 39,980,554.70 (54,980.30) 2,242,492.12
28 Lake Operations L.L.C., Amarillo,
Texas, USA . . ............. 100.00 26 USD — — 6)
—
29 Kloeckner Burlington Limited,
Burlington, Ontario, Canada ........ 100.00 20 CAD (5,931,566.11) (582,439.64) —
30 Kloeckner Alberta Limited, Calgary, Alberta,
Canada . . ....................... 100.00 20 CAD (325,462.01) 676,011.96 —
31 Klöckner USA Holding Inc., Wilmington,
Delaware, USA . .................. 100.00 4 USD (8,721,026.77) 21,666,514.32 —
32 Kloeckner & Co USA Beteiligungs GmbH,
Duisburg, Germany .................. 100.00 4 EUR 160,025,000.00 — 1)
—
33 Temtco Steel, LLC, Wilmington, Delaware,
USA............................ 100.00 31 USD 193,304,022.41 3,681,454.69 200,583,207.48
34 Debrunner Koenig Holding AG, St. Gallen,
Switzerland ...................... 100.00 4 CHF 18,328,172.55 49,580,367.01 —
35 Debrunner Acifer AG, St. Gallen,
Switzerland ...................... 100.00 34 CHF 135,582,191.47 39,919,890.92 655,695,893.09
36 Molok (Valais) SA, Siders, Switzerland . . . . 100.00 43 CHF 383,543.46 5,220.00 —
37 Debrunner Acifer SA Romandie, Crissier,
Switzerland . . .................. 100.00 34 CHF 31,597,401.86 8,900,869.32 184,970,095.65
38 Debrunner Acifer SA Giubiasco, Giubiasco,
Switzerland . . .................. 100.00 34 CHF 8,165,396.27 1,736,729.54 39,009,857.15
39 Metall Service Menziken AG, Menziken,
Switzerland . . .................. 100.00 34 CHF 11,902,297.29 3,073,676.70 97,867,947.21
40 Klöckner Stahl AG, St. Gallen,
Switzerland . . .................. 100.00 34 CHF 109,742.93 1,903.47 —
41 Koenig Feinstahl AG, Dietikon,
Switzerland . . .................. 100.00 34 CHF 19,030,949.27 3,153,565.74 71,063,524.87
42 Debrunner Koenig Management AG, St.
Gallen, Switzerland. ............. 100.00 34 CHF 3,227,993.82 259,443.83 —
43 Debrunner Acifer AG Wallis, Visp,
Switzerland . .................. 100.00 34 CHF 10,829,108.22 2,021,160.94 52,978,558.54
44 Bläsi AG, Bern, Switzerland ............ 100.00 34 CHF 20,939,229.16 4,682,806.78 44,806,902.46
45 ODS B.V., Rotterdam, The Netherlands ....... 100.00 20 EUR 38,260,692.22 4,029,425.70 223,823,332.76
46 O-D-S Transport B.V., Barendrecht, The
Netherlands ....................... 100.00 45 EUR 18,000.00 — —
47 ODS do Brasil Sistemas de Medicao LTDA,
Campinas São Paulo, Brazil . . . ........ 80.00 45 BRL 6,129,572.32 3,239,402.59 13,537,499.36
48 O-D-S N.V., Antwerp, Belgium ............ 99.50 45 EUR 2,277,367.68 458,821.81 4,932,498.44
0.50 20
49 ODS Metals N.V., Antwerp, Belgium ....... 100.00 45 EUR 860,376.61 (16,828.28) 6,187,166.92
50 Teuling Staal B.V., Barendrecht, The
Netherlands ...................... 100.00 45 EUR 4,276,216.07 (1,086,500.70) 4,696,551.15
51 Richardsons Westgarth Ltd., Leeds, United
Kingdom ...................... 100.00 25 GBP 17,379,253.00 — —
52 Armstrong Plate Ltd., Leeds, United
Kingdom ...................... 100.00 51 GBP (584,019.00) — —
53 Gardiner, Barugh & Jones Ltd., Leeds,
United Kingdom ................. 100.00 51 GBP 1,561,971.00 — —
54 Grange Steels Ltd., Leeds, United
Kingdom ...................... 100.00 51 GBP 558,489.00 — —
55 Hilton Steels Ltd., Leeds, United Kingdom. . . . . 100.00 51 GBP (83,890.00) — —
1) Profit and loss transfer agreement.
6) Amounts included in No. 27.
F-64

No. Entity
Interest
in
percent
Held by
entity
no.
Local
currency
Equity in local
currency
Net income in
local currency
Sales in local
currency
56 Humber Steel Stockholders Ltd., Leeds, United
Kingdom. ....................... 100.00 51 GBP 2,371,118.00 — —
57 RW Project Metals Ltd., Leeds, United
Kingdom ...................... 100.00 51 GBP 46,299.00 — —
58 Organically Coated Steels Ltd., Leeds,
United Kingdom ................. 100.00 51 GBP 2,803,828.00 — —
59 Parkin Steel Stockholders Ltd., Leeds,
United Kingdom ................. 100.00 51 GBP 343,591.00 — —
60 Peterborough Steels Ltd., Leeds, United
Kingdom ...................... 100.00 51 GBP (370,622.00) — —
61 RW Doncaster Ltd., Leeds, United
Kingdom ...................... 100.00 51 GBP (319,199.00) — —
62 John O. Holt & Sons Ltd., Leeds, United
Kingdom ...................... 100.00 51 GBP 249,843.00 — —
63 Armstrong Steel Ltd., Leeds, United
Kingdom ...................... 100.00 62 GBP 15,804,980.00 821,702.00 77,024,934.28
64 Berry Hill Group Ltd., Leeds, United
Kingdom ...................... 100.00 51 GBP 1,872,067.00 — —
65 James & Tatton Ltd., Leeds, United
Kingdom ...................... 100.00 64 GBP 2,096,520.00 — —
66 Westgarth Aberdeen Ltd., Bathgate, United
Kingdom ...................... 100.00 51 GBP (116,022.00) — —
67 JRS Steel Stockholders Ltd., Leeds, United
Kingdom . . ....................... 100.00 51 GBP (762,236.00) — —
68 Klöckner Distribution Industrielle S.A.,
Aubervilliers, France . . . ............. 96.77 4 EUR 103,879,390.00 (5,913,880.00) —
69 KDI Export S.A.S., Cergy-Pontoise, France . . . 100.00 72 EUR 1,227,706.23 77,499.80 46,876,097.60
70 Reynolds European S.A.S., Rueil Malmaison,
France . . ....................... 100.00 68 EUR 17,127,187.00 2,193,179.00 102,697,225.00
71 AT2T S.A.S., La Grand Croix, France . . . . . . 100.00 72 EUR 8,509,425.80 (29,345.48) 62,134,005.64
72 KDI S.A.S., Aubervilliers, France ....... 100.00 68 EUR 123,088,941.51 24,519,018.32 742,463,432.03
73 KDI Immobilier S.A.S., Aubervilliers,
France . . ....................... 100.00 72 EUR 70,474,945.29 4,577,373.43 11,432,149.71
74 Prafer SNC, Woippy, France ............ 100.00 72 EUR 3,566,680.20 182,078.83 6,914,426.26
75 KDI Davum S.A.S., Le Port, La Réunion,
France ........................... 100.00 72 EUR 4,277,022.49 300,477.73 20,182,930.95
76 KDI Authentic S.A.S., Aubervilliers, France . . . . 100.00 72 EUR 8,539,461.90 (73,663.59) 335,495.56
77 Comercial de Laminados S.A., Barcelona,
Spain . . . ....................... 100.00 14 EUR 62,032,538.04 (1,272,662.59) 242,338,280.20
78 Hierros del Turia S.A., Valencia, Spain. . . . . . 80.00 77 EUR 28,976,446.67 (523,991.07) 45,173,551.38
79 Perfiles Aragón S.A., Zaragoza, Spain . . . . . . 100.00 77 EUR 21,056,727.08 (853,556.99) 38,362,843.70
80 Cortichapa S.A., Valencia, Spain . . ........ 85.00 77 EUR 28,604,621.29 1,852,996.56 53,965,775.75
15.00 78
81 ASD Limited, Leeds, United Kingdom . . . . . . 100.00 25 GBP 31,848,495.00 4,223,768.00 243,159,832.66
82 ASD Westok Limited, Leeds, United
Kingdom. ....................... 100.00 25 GBP 10,223,196.00 1,002,500.00 13,433,385.57
83 ASD Interpipe Ltd., Leeds, United
Kingdom ...................... 100.00 25 GBP 1,798,869.00 663,278.00 15,301,423.57
84 ASD Multitubes Ltd., Leeds, United
Kingdom ...................... 100.00 25 GBP 120,716.00 671,935.00 4,585,610.86
85 NC Receivables Corporation,
Wilmington, Delaware, USA . . . . . . 100.00 26 USD 2,305,569.24 5,171.20 —
86 Comercial de Laminados Cobros S.L.,
Madrid, Spain . .................. 100.00 77 EUR 27,054.00 — —
87 Becker Stahl-Service GmbH, Duisburg,
Germany...................... 100.00 4 EUR 286,473,763.43 36,900,523.16 535,139,102.62
F-65

No. Entity
Interest
in
percent
Held by
entity
no.
Local
currency
Equity in local
currency
Net income in
local currency
Sales in local
currency
88 Becker Stahl GmbH, Bönen, Germany . . . . 100.00 87 EUR 341,201.43 181,201.43 4)
265,871.76
89 Becker Transport GmbH, Duisburg,
Germany...................... 100.00 87 EUR 67,577.24 35,284.01 5)
737,466.29
90 Becker Besitz GmbH, Duisburg, Germany . . 100.00 1 EUR 25,000.00 — 1),5)
—
91 Umformtechnik Stendal UTS GmbH &
Co. KG, Stendal, Germany ....... 100.00 87 EUR 2,768,438.38 (257,563.00) 4) 12,342,560.76
92 Umformtechnik Stendal UTS Verwaltung
GmbH, Stendal, Germany . . . ........ 100.00 91 EUR 26,743.77 743.77 4)
—
II. Non-consolidated affiliated companies
93 Sammi Klöckner International GmbH, Duisburg,
Germany ................................. 100.00 4 EUR (14,083,020.57) (13,769.90) —
94 KDI Courtages SARL, Paris, France . . ............. 100.00 68 EUR 13,218.00 (10,244.00) —
95 Richardson Westgarth Employees Trustees Ltd., Leeds,
United Kingdom ............................ 100.00 51 GBP 1.00 — —
96 Klöckner Steel Company Ltd., Leeds, United Kingdom . . . 100.00 4 GBP 61,266.00 — 2)
—
97 UAB Klöckner Baltija, Klaipeda, Lithuania . . . ........ 100.00 4 LTL (28,345.00) (186,002.00) 3,695,423.00
98 Umformtechnik Stendal UTS s.r.o., Skalica, Slovakia . . . . 100.00 91 EUR 82,160.00 12,958.00 35,101.00
III. Associates
99 Birs-Stahl AG, Birsfelden, Switzerland . ............. 50.00 35 CHF 690,877.41 40,599.44 3)
1,576,543.09
IV. Participations over 20%
100 GIE Mer, La Réunion, France. . .................. 20.00 75 EUR 11,037.00 3,037.00 2)
15,000.00
1) Profit and loss transfer agreement.
2) Financial statements as of December 31, 2008.
3) Financial statements as of December 31, 2009.
4) Financial statements as of September 30, 2010.
5) Stub period from March 1 until December 31, 2010.
F-66

Annex to the notes to the financial statements and notes to the consolidated financial statements of
Klöckner & Co SE
Information pursuant to Section 160 para. 1 No. 8 German Stock Corporations Act (AktG)
Notifying institutions Domicile
Voting
interest
in percent
Date on which
threshold was met
Increase over threshold
FIL Holdings Limited ............ Hildenborough, United Kingdom 3.80 January 2, 2009
FIL Holdings Limited ............
Norges Bank (Central Bank of
Hildenborough, United Kingdom 3.06 June 22, 2009
Norway) ***) ..................
Norges Bank (Central Bank of
Oslo, Norway 3.19 May 11, 2010
Norway) ***) .................. Oslo, Norway 5.15 May 20, 2010
Amundi S.A. **) ................. Paris, France 3.03 January 3, 2011
Amundi S.A. **) .................
Decrease below threshold
Paris, France 3.003 January 28, 2011
FIL Holdings Limited ............ Hildenborough, United Kingdom 2.89 March 19, 2009
FIL Holdings Limited ............ Hildenborough, United Kingdom 2.99 September 23, 2009
FIL Limited . ................... Hamilton, Bermuda 2.97 September 25, 2009 *)
FIL Investment Management
Limited . . ................... Hildenborough, United Kingdom 2.97 September 25, 2009 *)
BlackRock Institutional
Trust Company, N.A. **) .........
BlackRock Delaware Holdings,
California, USA 2.80 April 27, 2010
Inc. **) ...................... Delaware, USA 2.80 April 27, 2010
BlackRock Holdco 6 LLC **)
....... NewYork, USA 2.80 April 27, 2010
BlackRock Holdco 4 LLC **)
....... NewYork, USA 2.80 April 27, 2010
BlackRock Financial Management,
Inc. **) ...................... NewYork, USA 4.87 April 27, 2010
BlackRock Holdco 2, Inc. **) ........ Delaware, USA 4.87 April 27, 2010
BlackRock, Inc. **) ...............
BlackRock Financial Management,
NewYork, USA 4.87 April 27, 2010
Inc. **) ...................... NewYork, USA 2.78 June 8, 2010
BlackRock Holdco 2, Inc. **) ........ Delaware, USA 2.78 June 8, 2010
BlackRock, Inc. **) ............... NewYork, USA 2.78 June 8, 2010
Franklin Mutual Advisers, LLC **)
. . . Short Hills, USA 4.66 July 26, 2010
Franklin Mutual Series Funds ....... Short Hills, USA 4.64 July 26, 2010
Franklin Mutual Series Funds ....... Short Hills, USA 2.86 August 4, 2010
Franklin Mutual Advisers, LLC **)
. . . Short Hills, USA 2.66 August 6, 2009
Amundi S.A. **) ................. Paris, France 2.98 January 20, 2011
*) Correction of prior notification.
**) Partly attributed holding.
***) State of Norway.
F-67

The following auditor’s report, prepared in accordance with § 322 HGB (“Handelgesetzbuch”: “German
Commercial Code”), refers to the complete consolidated financial statements, comprising the statement of income,
the statement of comprehensive income, the statement of financial position, the statement of cash flows, the
summary of changes in equity and the notes to the financial statements, together with the group management report
which is combined with the management report of Klöckner & Co SE for the business year from January 1, 2010 to
December 31, 2010. The combined group management report is not included in this prospectus.
AUDITOR’S REPORT
We have audited the consolidated financial statements prepared by Klöckner & Co SE, Duisburg, comprising
statement of income, statement of comprehensive income, statement of financial position, statement of cash flows,
summary of changes in equity and notes to the financial statements, together with the management report for the
Company and the Group for the business year from January 1, 2010 to December 31, 2010. The preparation of the
consolidated financial statements, the management report of the Company and the Group in accordance with IFRSs
as adopted by the EU, and the additional requirements of German commercial law pursuant to Section 315a
paragraph 1 HGB (Handelsgesetzbuch “German Commercial Code”) are the responsibility of the parent Company’s
management. Our responsibility is to express an opinion on the consolidated financial statements, on the
management report of the Company and on the Group based on our audit.
We conducted our audit of the consolidated financial statements in accordance with Section 317 HGB and
German generally accepted standards for the audit of financial statements promulgated by the Institut der
Wirtschaftsprüfer (IDW) as well as supplementary consideration of International Standards on Auditing (ISA).
Those standards require that we plan and perform the audit such that misstatements materially affecting the
presentation of the net assets, financial position and results of operations in the consolidated financial statements in
accordance with the applicable financial reporting framework and in the Group management report are detected
with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the
Group and expectations as to possible misstatements are taken into account in the determination of audit
procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the
disclosures in the consolidated financial statements and the Group management report are examined primarily on a
test basis within the framework of the audit. The audit includes assessing the annual financial statements of those
entities included in consolidation, the determination of entities to be included in consolidation, the accounting and
consolidation principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements and the management report of the Group. We believe that our
audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs, as
adopted by the EU, the additional requirements of German commercial law pursuant to Section 315a para. 1 HGB
and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance
with these requirements. The Group management report is consistent with the consolidated financial statements and
as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risks of future
development.
Düsseldorf,
February 21, 2011
KPMG AG
Wirtschaftsprüfungsgesellschaft
Philippi
Wirtschaftsprüfer
Michels-Scholz
Wirtschaftsprüfer
F-68

AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
KLÖCKNER & CO SE AS OF AND FOR THE FINANCIAL YEAR
ENDED DECEMBER 31, 2009 (IFRS)
F-69

Consolidated statement of income for the 12-month period ending December 31, 2009
Notes 2009 2008*)
(E thousand)
Sales. .................................................... (7) 3,860,493 6,749,595
Other operating income ....................................... (8) 127,359 371,182
Change in inventory ......................................... (8,661) 10,832
Own work capitalized ........................................ 10 73
Cost of materials ............................................ (9) (3,206,830) (5,394,417)
Personnel expenses .......................................... (10) (441,184) (546,017)
Depreciation, amortization and impairments ........................ (109,638) (67,372)
thereof impairment losses ..................................... (41,782) —
Other operating expenses. ..................................... (11) (399,684) (590,612)
Operating result ........................................... (178,135) 533,264
Income from investments. ..................................... 2 —
Finance income ............................................. 9,006 6,981
Finance expenses ........................................... (70,705) (76,763)
Financial result ............................................ (12) (61,699) (69,782)
Income before taxes. ........................................ (239,832) 463,482
Income taxes. .............................................. (13) 54,168 (79,308)
Net income ............................................... (185,664) 384,174
thereof attributable to
— shareholders of Klöckner & Co SE ............................ (188,484) 398,335
— non-controlling interests .................................... 2,820 (14,161)
Earnings per share ......................................... (14)
— basic .................................................. (3.61) 8.56
— diluted. ................................................ (3.61) 8.11
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4 to the consolidated financial statements).
F-70

Statement of comprehensive income for the 12-month period ending December 31, 2009
2009 2008*)
(E thousand)
Net income .........................................................
Income/expenses directly recognized in equity
(185,664) 384,174
Foreign currency translation ............................................. (6,788) 47,272
Gain/loss from cash flow hedges. ......................................... 19,900 (43,807)
Related income tax. ................................................... (3,602) 8,113
Other comprehensive income ............................................ 9,510 11,578
Total comprehensive income. ........................................... (176,154) 395,752
thereof attributable to
— shareholders of Klöckner & Co SE .................................... (178,989) 411,003
— non-controlling interests ............................................ 2,835 (15,251)
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4 to the consolidated financial statements).
F-71

Consolidated statement of financial position as of December 31, 2009
Notes
December 31,
2009
December 31,
2008*)
(E thousand)
January 1,
2008*)
Assets
Non-current assets
Intangible assets ................................. (15a) 194,985 235,931 197,581
Property, plant and equipment. ...................... (15b) 426,151 479,421 482,138
Investment property .............................. (15c) 11,675 13,188 —
Financial assets ................................. 2,376 2,364 2,661
Other assets .................................... (18) 26,736 34,332 27,377
Income tax receivable. ............................ (13) 11,638 — —
Deferred tax assets ............................... (13) 38,355 46,491 33,336
Total non-current assets ..........................
Current assets
711,916 811,727 743,093
Inventories ..................................... (16) 570,918 1,000,612 955,644
Trade receivables ................................ (17) 464,266 798,618 929,964
Income tax receivable. ............................ (13) 72,224 29,388 6,572
Other assets .................................... (18) 65,840 141,845 86,367
Liquid funds ................................... (19) 826,517 296,636 153,558
thereof cash and cash equivalents .................... 826,517 293,531 153,558
thereof restricted cash. ............................ — 3,105 —
Assets held for sale .............................. (20) 1,081 4,942 98,596
Total current assets ............................. 2,000,846 2,272,041 2,230,701
Total assets ....................................
Equity and liabilities
Equity
2,712,762 3,083,768 2,973,794
Subscribed capital ............................... 166,250 116,250 116,250
Capital reserves ................................. 429,493 260,496 260,496
Retained earnings ................................ 518,621 708,272 418,263
Accumulated other comprehensive income .............
Equity attributable to shareholders of
(6,169) (15,664) (28,332)
Klöckner & Co SE ............................. 1,108,195 1,069,354 766,677
Non-controlling interests. .......................... 15,068 11,998 84,283
Total equity ...................................
Non-current liabilities and provisions
(21) 1,123,263 1,081,352 850,960
Provisions for pensions and similar obligations ........ (23) 174,598 180,095 188,457
Other provisions ............................... (24) 31,287 36,924 59,151
Income tax liabilities ........................... (13) 20 50 92
Financial liabilities ............................. (25) 618,744 813,000 813,076
Other liabilities. ............................... (27) 31,080 59,634 8,962
Deferred tax liabilities .......................... (13) 71,029 86,873 83,969
Total non-current liabilities .......................
Current liabilities
926,758 1,176,576 1,153,707
Other provisions. ................................ (24) 109,868 284,766 144,355
Income tax liabilities ............................. (13) 50,667 19,139 18,223
Financial liabilities ............................... (25) 52,169 48,112 72,644
Trade payables .................................. (26) 398,387 392,183 609,863
Other liabilities ................................. (27) 51,650 81,640 91,748
Liabilities associated with assets held for sale ........... (20) — — 32,294
Total current liabilities ........................... 662,741 825,840 969,127
Total liabilities ................................. 1,589,499 2,002,416 2,122,834
Total equity and liabilities ........................ 2,712,762 3,083,768 2,973,794
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4 to the consolidated financial statements).
F-72

Consolidated statement of cash flows for the 12-month period ending December 31, 2009
2009 2008*)
(E thousand)
Income before taxes .................................................. (239,832) 463,482
Financial result ...................................................... 61,699 69,782
Depreciation, amortization and impairments ................................. 109,638 67,372
Other non-cash income and expenses ...................................... (80,128) 63,187
Gain on disposal of subsidiaries and other non-current assets .................... (9,066) (277,414)
Operating cash flow ................................................. (157,689) 386,409
Changes in provisions .................................................
Changes in other assets and liabilities
(54,441) (722)
Inventories ....................................................... 431,161 (6,444)
Trade receivables. .................................................. 337,589 143,449
Other receivables. .................................................. 24,321 (43,326)
Trade payables .................................................... 581 (223,699)
Other liabilities .................................................... (30,139) 24,681
Income taxes paid .................................................... 13,279 (93,464)
Cash flow from operating activities ..................................... 564,662 186,884
Proceeds from the sale of non-current assets and assets held for sale .............. 14,665 11,565
Proceeds from / disbursements for the sale of consolidated subsidiaries ............ (779) 376,101
Payments for intangible assets, property, plant and equipment. ................... (25,023) (48,111)
Acquisition of subsidiaries. ............................................. — (264,360)
Margin deposits for derivative transactions .................................. 3,105 (3,105)
Cash flow from investing activities ...................................... (8,032) 72,090
Issue proceeds of convertible bond (incl. equity component) ..................... 95,681 —
Capital increase by issuance of new shares .................................
Dividends paid to
193,134 —
— shareholders of Klöckner & Co SE ................................... — (37,200)
— non-controlling interests ........................................... (980) (2,478)
Borrowings ......................................................... 71,972 425,187
Repayment of financial liabilities. ........................................ (355,497) (471,186)
Interest paid ........................................................ (34,635) (45,398)
Interest received ..................................................... 6,477 7,636
Cash flow from financing activities ...................................... (23,848) (123,439)
Changes in cash and cash equivalents .................................... 532,782 135,535
Effect of foreign exchange rates on cash and cash equivalents ................... 204 4,438
Cash and cash equivalents at the beginning of the period ....................... 293,531 153,558
Cash and cash equivalents at the end of the period ......................... 826,517 293,531
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4 to the consolidated financial statements).
F-73

Subscribed capital of
Klöckner & Co SE
Summary of changes in equity
Capital reserves of
Klöckner & Co SE
Retained
earnings
Accumulated other
comprehensive income
Currency
translation
adjustment
(E thousand)
Fair value
adjustments of
financial
instruments
Equity attributable
to shareholders of
Klöckner & Co SE
Non-controlling
interests Total
Balance as of January 1, 2008
as previously reported .....
Initial application of
116,250 260,496 412,227 (27,737) (595) 760,641 84,283 844,924
IFRIC 14*) ............
Balance as of January 1, 2008
as restated for effects of
6,036 6,036 6,036
IFRIC 14 .............
Income/expenses directly
recognized in equity
116,250 260,496 418,263 (27,737) (595) 766,677 84,283 850,960
Foreign currency translation . . . .
Gain/loss from cash flow
47,272 47,272 47,272
hedges . . . ............ (43,807) (43,807) (43,807)
Related income tax . . .......
Reclassification to profit and loss
due to sale of foreign
(5,336) 13,449 8,113 8,113
subsidiaries ............ 1,090 1,090 1,090
Net income . . ............ 398,335 398,335 (14,161) 384,174
Total comprehensive income ...
Acquisition of non-controlling
411,003
interests . . ............ (71,126) (71,126) (55,646) (126,772)
Dividends . . . ............
Balance as of
December 31, 2008
as restated for effects of
(37,200) (37,200) (2,478) (39,678)
IFRIC 14 ............. 116,250 260,496 708,272 15,289 (30,953) 1,069,354 11,998 1,081,352
Balance as of January 1, 2009 ..
Income/expenses directly
recognized in equity
116,250 260,496 708,272 15,289 (30,953) 1,069,354 11,998 1,081,352
Foreign currency translation . . . .
Gain/loss from cash flow
(6,803) (6,803) 15 (6,788)
hedges . . . ............ 19,900 19,900 19,900
Related income tax . . ....... 2,508 (6,110) (3,602) (3,602)
Net income . . ............ (188,484) (188,484) 2,820 (185,664)
Total comprehensive income ...
Acquisition of non-controlling
(178,989)
interests . . ............
Change in scope of
(1,167) (1,167) 1,165 (2)
consolidation ...........
Equity component of convertible
50 50
bond ................
Capital increase by issuance of
25,863 25,863 25,863
new shares . ............ 50,000 143,134 193,134 193,134
Dividends . . . ............
Balance as of
(980) (980)
December 31, 2009 ....... 166,250 429,493 518,621 10,994 (17,163) 1,108,195 15,068 1,123,263
*) See Note 4 to the consolidated financial statements.
F-74

Notes to the consolidated financial statements of Klöckner & Co SE, Duisburg, as of December 31, 2009
(1) Company information
Klöckner & Co SE (“Klöckner & Co” or “the Company”) is a listed corporation domiciled in Duisburg, Am
Silberpalais 1. Klöckner & Co SE is entered in the commercial register of the Duisburg Local Court under HRB
20486. The consolidated financial statements of Klöckner & Co SE and its subsidiaries (“Klöckner & Co Group” or
“Group”) were authorized for issuance to the Supervisory Board by way of resolution of the Management Board on
February 26, 2010. The Supervisory Board’s responsibility is to audit such financial statements and to issue a
statement as to whether it will approve the consolidated financial statements.
The Klöckner & Co Group is the largest mill-independent multi metal distributor in Europe and North
America. Alongside trading of steel, aluminum and various industrial products, it also provides a range of
associated services.
The shares of Klöckner & Co SE were listed in the MDAX» on January 29, 2007.
(2) Accounting policies
The consolidated financial statements as of December 31, 2009 were prepared in accordance with International
Financial Reporting Standards (“IFRS”), as adopted by the EU, and the additional requirements of the
German Commercial Code (“HGB” — Handelsgesetzbuch) pursuant to Section 315a para. 1 HGB. All binding
IFRS and the associated interpretations of the International Financial Reporting Interpretations Committee
(“IFRIC”) as of December 31, 2009 were applied.
The financial statements of the companies included in the consolidated financial statements, all of which have
been prepared as of December 31, 2009, are based on uniform accounting policies.
The consolidated financial statements are prepared in euros. Unless otherwise indicated, all amounts are stated
in thousands of euros (A thousand). Deviations from the unrounded amounts may arise.
With the exception of certain financial instruments that are accounted for at fair value, the consolidated
financial statements have been prepared on the historical cost basis.
(3) Scope and principles of consolidation
Scope of consolidation
The consolidated financial statements incorporate the financial statements of Klöckner & Co SE and the
companies controlled by Klöckner & Co SE (“subsidiaries”). Control is achieved when Klöckner & Co holds the
majority of the voting rights or by other means is able to govern the financial and operating policy of an entity in
order to obtain the economic benefit from its activities.
Under the Group’s European asset-backed securitization program (“ABS program”) a total of 13 specialpurpose
entities were formed. In 2009 the Group acquired all interests in nine of these special-purpose entities, all of
which are currently dormant. As these entities already formed part of the scope of consolidation in previous years
the acquisitions did not result in a change in the scope of consolidation. None of the Group companies holds an
equity interest in the remaining four special-purpose entities. However, they were established for the sole purpose of
purchasing and collecting receivables of Klöckner & Co subsidiaries. As such the economic substance of the
relationship between Klöckner & Co and these special-purpose entities indicates that these companies are also
controlled by Klöckner & Co and are therefore to be included in the consolidated financial statements. A further
special-purpose entity which is responsible for the acquisition of trade receivables under the American ABS
program is consolidated under the general consolidation rules.
The financial statements of subsidiaries acquired or disposed of in the course of the financial year are included
in the consolidated financial statements from the time control is achieved to the time it is surrendered.
Intragroup receivables, liabilities and intercompany results are eliminated in consolidation. Consolidation
entries are subject to deferred taxes. Deferred tax assets and liabilities are offset against each other if the term and
levying taxation authority are identical.
F-75

The scope of consolidated companies changed as follows:
2009 2008
Consolidated entities at the beginning of the financial year *) ............................ 116 167
+ business combinations ...................................................... — 4
+ newly formed/consolidated companies. .......................................... 2 2
- mergers ................................................................. (3) (15)
- disposals and liquidations .................................................... (6) (42)
Consolidated entities at the end of the financial year ................................. 109 116
thereof domestic entities including Klöckner & Co SE *) ............................. 10 11
*) Including consolidated special-purpose entities.
5 (2008: 6) subsidiaries which do not have a significant impact on the Group’s net assets, financial results and
results of operations are not consolidated. Net income of these entities represents only – 0.01% (2008: 0.01%) of
consolidated net income. The impact on the Group’s equity amounts to – 1.24% (2008: – 1.21%). Such subsidiaries
are accounted for as financial assets at cost as their fair values cannot be determined reliably.
ODS do Brasil Sistemas de Mediçao LTDA Campinas, São Paulo, Brazil, established in 2008, which was not
consolidated in 2008 based on materiality aspects, has been included in the scope of consolidation from January 1,
2009.
Joint ventures
A joint venture is a contractual agreement under which Klöckner & Co and other parties undertake an activity
that is subject to joint control. Joint venture agreements that involve the establishment of a separate entity in which
each venturer has an interest are referred to as jointly controlled entities.
As jointly controlled entity the 50% interest in Debrunner Koenig Informatik AG, Dietikon, Switzerland, is
accounted for under the equity method. The company was sold on January 21, 2010.
Under the equity method investments in associated companies are carried at cost as adjusted for postacquisition
changes in the Group’s share of the net assets of the investee. Proportionate losses exceeding the
carrying amount of the associated company are not recognized unless an obligation to compensate such losses
exists. Any goodwill recognized upon acquisition is included in the carrying amount of the investee. Unrealized
intercompany profits from transactions with associated companies carried at equity are eliminated.
A list of affiliated companies included in the consolidated financial statements is attached as annex.
(4) Significant accounting policies
Business combinations
Business combinations are accounted for under the purchase method whereby the cost of the investment is
offset against the investee’s net assets which is remeasured to fair value. The net assets are based on the fair values of
the assets and liabilities, including identifiable intangible assets and contingent liabilities to be recognized as
liabilities, as of the date of acquisition.
If published exchange or market prices cannot be obtained for allocating the purchase price, the fair values are
calculated on the basis of suitable valuation techniques. Generally, the discounted cash flow method is used in such
cases. Under this method, the expected future cash flows that can be generated by the asset are discounted to the date
of the initial consolidation using a discount rate reflecting the inherent risk associated to the asset.
Any remaining excess of the cost of the acquired company over its proportional share of net assets is
recognized separately as goodwill; any negative difference is upon reassessment of the acquired assets and
liabilities directly recognized in the income statement. Audit and consulting fees incurred in business combinations
are expensed as incurred.
Subsequent changes in interests in consolidated subsidiaries that do not result in a loss of control are treated as
equity capital transactions.
F-76

Foreign currency translation
Transactions denominated in foreign currency are translated using the exchange rate at the time of the
transaction. Monetary items are translated using the current exchange rate at the balance sheet date. Irrespective of
any currency hedges, gains or losses from the remeasurement of monetary assets and liabilities are recognized in the
income statement as other operating income or expenses.
Applying the functional currency concept, the annual financial statements of the foreign subsidiaries prepared
in foreign currency are translated into euros. The functional currency is determined by the primary economic
environment in which the entity operates. All subsidiaries conduct their business independently in their domestic
markets. As such, the functional currency for those entities is the local currency. Assets and liabilities of subsidiaries
are translated at the middle rate on the reporting date while income and expenses are translated at the average
exchange rate of the reporting period. Differences arising from such translations applied to the assets, liabilities and
components of net income are reported as a separate component of equity and accordingly do not have an impact on
net income.
The exchange rate changes for the main currencies of the Group developed as follows:
Closing rate Average rate
December 31, 2009 December 31, 2008 2009 2008
1 E =
US Dollar (USD) .......................... 1.4405 1.3918 1.3949 1.4708
Pound Sterling (GBP). ...................... 0.8881 0.9525 0.8909 0.7963
Swiss Franc (CHF). ........................ 1.4836 1.4850 1.5100 1.5874
Revenue recognition
Revenues from sales of goods are recognized when the material risks and rewards associated with ownership
have been transferred to the buyer and the amount of revenues can be reliably measured. This is generally the time
of delivery. Prior to delivery, revenues are only recognized when goods have not been delivered at the request of the
buyer but ownership has been transferred and the buyer has accepted billing. Sales are reported net of allowances
such as commissions, trade discounts and rebates.
Interest income is accrued on a time basis by reference to the principal amount and the effective interest rate.
Dividend income is recognized when the right to receive payment has been established.
Share-based payment
The Group’s share-based compensation plans are virtual stock option plans with cash settlement (“VSO”). As
of the respective reporting date, a provision is recognized pro rata temporis in the amount of the fair value of the
payment obligation; any subsequent change in the fair value is recognized in profit or loss. After the expansion of
the program the fair value of the virtual share options is calculated on the basis of an option pricing model based on a
Monte Carlo simulation using the following parameters:
December 31, 2009 December 31, 2008
%
Risk-free rate or return ..................................... 0.8-3.2 2.1-2.4
Expected volatility ........................................ 51.0 85.0
Earnings per share
Earnings per share are calculated by dividing consolidated net income for the year attributable to shareholders
of Klöckner & Co SE by the average number of shares outstanding during the period. The dilutive, potential shares
of the outstanding convertible bonds are included in the calculation of diluted earnings to the extent that such shares
are not anti-dilutive.
Income taxes
Income tax expense represents the total of current and deferred tax expenses.
Current tax expenses are calculated on the basis of the taxable income for the financial year. The taxable
income differs from the income before taxes for the year reported in the income statement as it does not include
income or expenses that will not be taxable or tax deductible until later financial years, if at all. Tax liabilities are
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measured at the amount for which payment to the taxation authorities is expected. The liabilities are measured at the
tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred taxes are calculated in line with the concept of the balance sheet liability method. Deferred tax assets
result from temporary differences in the carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable profits and from consolidation
entries. Such deferred tax assets or liabilities are not recognized if the temporary differences arise from goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
neither affects taxable profits nor the accounting profits.
A deferred tax asset is also recognized for the carryforward of unused tax losses to the extent that it is probable
that future taxable profit will be available against which the unused tax losses can be utilized.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow part of or the entire deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each
balance sheet date and a previously unrecognized deferred tax asset is recognized to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are calculated using tax rates that have been enacted or substantively enacted
by the balance sheet date. The measurement of deferred tax liabilities and deferred tax assets reflects the tax
consequences that would follow from the manner in which Klöckner & Co expects, at the balance sheet date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right to set off current tax
assets against current tax liabilities exists and the deferred tax assets and the deferred tax liabilities relate to income
taxes levied by the same taxation authority and a net settlement is intended.
Current and deferred taxes are recognized in income unless they relate to items that are recognized directly in
equity. In such cases, they are also charged or credited to equity.
Intangible assets
Intangible assets with finite useful lives are carried at cost less accumulated amortization if the use of the asset
entails an economic benefit and the costs of the asset can be reliably determined. Intangible assets are amortized on
a straight-line basis in line with their estimated useful life over a period generally between two and 15 years. The
useful life is reviewed annually and future expectations are adjusted if necessary. Intangible assets with an indefinite
useful life that are not being amortized are reviewed for impairment annually or more frequently if indications for
impairment arise.
Property, plant and equipment
Property, plant and equipment is carried at acquisition or manufacturing cost less accumulated depreciation.
The manufacturing costs comprise all direct costs as well as attributable overheads, with the exception of financing
costs. Administrative costs are capitalized to the extent they relate to production.
Maintenance and repair costs are expensed as incurred.
Property, plant and equipment subject to depreciation are amortized on a straight-line basis. On disposal or
retirement, the cost and the corresponding accumulated depreciation are derecognized, any gain or loss is
recognized in income.
Depreciation is based on the following useful lives:
Useful life in years
Office building, factory and warehouse buildings ................................. 20–50
Plant facilities similar to buildings. ........................................... 10–33
Warehouse and crane equipment and other technical equipment ...................... 4–20
Operating and office equipment .............................................. 3–15
Leases
Assets held under finance leases are initially recognized at fair value at the inception of the lease, or if lower, at
the present value of the minimum lease payments. The corresponding liability is included in the balance sheet as
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financial liability. Assets held under finance leases are depreciated over their expected useful lives, or where shorter,
the term of the underlying lease.
Investment property
Land and buildings held to earn rentals or for capital appreciation rather than for use in the delivery of goods or
for providing services or for administrative purposes are presented as investment property. Measurement of such
property follows the cost model. The fair values of such property are disclosed in Note 15 Intangible assets,
property, plant and equipment and investment property.
Depreciation methods and useful lives are similar to those for property, plant and equipment.
Impairment
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to
determine if there is any indication of impairment. If such indication exists, the recoverable amount of the asset is
estimated to determine the extent of the impairment loss. The recoverable amount is the higher value of the fair
value less cost to sell and the value in use. In those instances in which the recoverable amount for the specific asset
cannot be estimated, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is
increased to the extent that the increased carrying amount does not exceed the carrying amount that would have
been determined if no impairment loss had been recognized for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognized immediately as income.
Goodwill arising from the acquisition of subsidiaries is tested for impairment at least annually. The impairment
test is performed at the level of the cash-generating unit to which the goodwill has been assigned. Cash-generating
units are the lowest reporting level in the Group at which management monitors goodwill for internal reporting
purposes. For the Klöckner & Co Group the national sub-consolidation groups generally represent the cashgenerating
units. The annual impairment test for goodwill is performed in the fourth quarter of each financial
year — or more frequently when there is an indication that the unit may be impaired. If the carrying amount exceeds
the recoverable amount, an impairment loss is recognized in the amount of the difference and cannot be reversed in
subsequent periods.
The recoverable amount is the higher value of fair value less cost to sell and value in use. The value in use
represents the discounted cash flow of the asset or cash generating unit, respectively. Value in use or fair value less
cost to sell is usually determined using a discounted cash flow approach. The estimated cash flows are based on the
Company’s current business plan for the following three years, based on management’s estimates for the respective
business unit. The interest rates used reflect the risk specific to the underlying business and the country in which the
business is operated.
Impairment losses are reported in the income statement under impairment losses. Reversals of impairment
losses are included in other operating income.
Inventories
Inventories are stated at the lower of cost or net realizable value. The manufacturing costs comprise
production-related costs calculated on the basis of normal capacity. In addition to the directly attributable costs,
adequate material and production overhead expenses including depreciation are reflected in the manufacturing
costs. Cost is generally assigned to inventories on the basis of the monthly moving average method. In selected
cases the specific identification method is applied.
Financial instruments
Financial instruments are any contracts that give rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
The Group’s financial assets primarily consist of cash and cash equivalents, available for sale financial
instruments, trade receivables and derivative financial instruments with positive fair values. The Group’s financial
liabilities include bonds, liabilities due to banks, trade payables, finance lease liabilities and derivative financial
instruments with negative fair values.
The Klöckner & Co Group recognizes all regular-way contracts as of the settlement date regardless of their
classification. For derivative financial instruments classified as “held for trading” the Group applies trade date
accounting.
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The fair value option provided by IAS 39 (Financial Instruments: Recognition and Measurement) is not
applied.
Financial instruments are initially measured at fair value, plus transaction costs directly attributable to the
acquisition or issue unless such financial instruments are classified at fair value through profit or loss. Subsequent
measurement of financial assets and liabilities depends on the financial instruments classification to categories of
IAS 39.
a) Financial assets and financial liabilities (excluding derivative financial instruments) and equity
instruments issued by Klöckner & Co
Cash and cash equivalents include cash on hand, bank balances and short-term securities with an original
maturity of less than three months with an insignificant risk of changes in value and are stated at nominal value.
Foreign currency balances are converted into euros at the bid rate on the balance sheet date.
Financial assets at fair value through profit or loss include financial assets initially classified as held for
trading. In the Klöckner & Co Group, this classification only applies for derivative financial instruments unless
designated in a documented hedge. Such instruments are presented as other assets in the Group’s consolidated
financial statements.
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Loans and receivables are measured at amortized cost using the effective interest method. Also assigned to
this category are non-current loans and non-current securities that do not have a quoted market price in an active
market, which are measured at amortized cost.
All identified risks are allowed for by making appropriate valuation adjustments to reflect the risk of default,
taking into account the credit insurance that is in place. The carrying amounts of financial assets are assessed for
impairment if there is objective evidence, such as substantial financial difficulty on the part of the obligor,
knowledge of insolvency proceedings or being overdue.
Non-derivative financial assets that are not assigned to any of the other categories described in IAS 39 are
classified as “available for sale financial assets” and are measured at fair value. Such assets include as well shares in
unconsolidated subsidiaries and other equity instruments that do not have a quoted market price in an active market
and whose fair value cannot be reliably measured which are accounted for at cost. If required valuation allowances
are established through profit or loss to account for an impairment loss. Impairment losses are reversed when the
reasons for such impairment losses no longer apply unless they relate to “available for sale financial assets” that are
accounted for at cost for which no reversal of impairment losses is allowed.
Financial instruments are initially recognized as a financial liability or an equity instrument in accordance with
the substance of the contractual agreement. An equity instrument is any contract that evidences a residual interest in
the assets of the entity after deducting all its liabilities. An equity instrument is recognized in the amount of the
proceeds received from the issuance less directly attributable transaction costs.
The components of compound financial instruments such as the convertible bonds are recognized separately as
financial liabilities and equity. The fair value of the liability component was calculated using a market interest rate
for equivalent financial instruments without conversion rights. Subsequent accounting of the liability component
will be on an amortized cost basis until conversion or maturity of the bond. In line with the residual method the
remaining difference represents the equity component which is reported within capital reserves with no subsequent
adjustment. Financial liabilities are either classified as fair value through profit or loss or as other financial
liabilities.
Klöckner & Co Group only classifies derivative financial instruments that are not designated as hedge and are
effective as liabilities measured at fair value through profit or loss. The negative fair value of such instruments is
reported under other liabilities.
Other financial liabilities, including borrowings, are initially recognized at fair value less transaction costs.
After initial recognition, other financial liabilities are measured at amortized cost using the effective interest
method.
b) Derivative financial instruments
The Group uses a variety of derivative financial instruments to manage its exposure to interest and foreign
exchange rate risks. These include forward exchange transactions, currency swaps, cross currency swaps, interest
rate swaps and interest rate collars. Further information is disclosed in Note 30 Derivative financial instruments.
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Derivative financial instruments are initially reported at fair value at the conclusion of the agreement. The fair
value is adjusted at each subsequent balance sheet date. Any gain or loss arising from a change in the fair value of a
derivative financial instrument that is not part of a cash flow hedging relationship and for which the hedging
relationship is effective is recognized in the income statement. For derivative financial instruments designated in a
hedging relationship the timing of the recognition of gains or losses is dependent on the nature of the hedge. The
Klöckner & Co Group uses certain derivative financial instruments to hedge recognized assets or liabilities. In
addition, hedge accounting is applied for certain unrecognized firm commitments.
Forward exchange transactions are valued on an item-by-item basis at the forward rate on the balance sheet
date, and exchange rate differences arising because of the contracted forward exchange rate are included in the
income statement.
Interest rate swap amounts from interest rate swap agreements are recognized in the income statement at the
payment date or the balance sheet date. In addition, interest rate swap agreements as well as interest rate caps are
carried at their fair value as of the balance sheet date, and, provided that no hedge accounting is applied, changes in
the fair values are recognized in the income statement for the current reporting period.
Derivative financial instruments designated in hedging transactions are classified as non-current assets or
liabilities if the remaining term of the hedging relationship is more than twelve months or as current assets or
liabilities, respectively, if the remaining term of the hedging relationship is less than twelve months.
Derivative financial instruments not designated in a hedging relationship are classified either as current assets
or liabilities.
c) Hedge accounting
Depending on volume, term and risk structure, the Klöckner & Co Group designates individual derivative
financial instruments as cash flow hedges.
The relationship between the hedged item and the hedging instrument including the risk management
objectives and the strategy for undertaking the hedge transaction are documented at the inception of the hedge.
In addition, at the inception of a hedging transaction and over its term, the Company regularly reviews and
documents whether the hedge is highly effective in terms of compensating the changes in the cash flows of the
hedged item. Information on the fair values of these derivative financial instruments is provided in Note 30
Derivative financial instruments; changes in the reserve for fair value adjustments of financial instruments within
equity can be derived from the statement of changes in equity.
Cash flow hedges
The effective portion of the change in the fair value of derivative financial instruments designated as cash flow
hedges is recognized in equity; the ineffective portion is recognized directly in income or loss. The amounts
recognized in equity are reclassified to profit or loss in the period in which the hedged item is recognized in income.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or is
no longer deemed effective. Any cumulative gain or loss deferred in equity at that time remains in equity and is
recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no
longer expected to occur, the cumulative profit or loss deferred in equity is immediately recognized in income or
expense.
Non-current assets held for sale and associated liabilities
Non-current assets or groups of such assets which are disposed of in a single transaction (disposal groups)
including the associated liabilities are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is met only when the
disposal is highly probable and the asset or disposal group is available for immediate sale in its present condition.
Depreciation and amortization is no longer recognized on assets held for sale. They are carried at the lower of
the carrying amount or fair value less costs to sell.
Provisions for pensions and similar obligations
Pension obligations arising from defined benefit plans are determined using the projected unit credit method.
The expected benefits, including dynamic components, are recognized over the total service period of the respective
employee. Actuarial advice has been obtained.
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Actuarial gains or losses resulting from deviations between forecast and actual changes in plan beneficiaries as
well as actuarial assumptions that exceed 10% of the greater of the present value of the defined benefit obligation
and the fair value of plan assets are amortized over the expected remaining working lives of the participating
employees.
Service costs are reported in personnel expenses, the interest costs in interest expense.
Any surplus of the assets over the liabilities to be recognized is limited to the cumulative, unrecognized,
actuarial losses and past service cost, plus the present value of any available refunds and the reduction of future
contributions to the plan.
Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise
amortized on a straight-line basis over the average service period until the benefits become vested.
Employer contributions made by the Klöckner & Co Group to an independent entity under defined contribution
plans and to which no further legal or constructive payment obligations may arise are expensed as incurred.
Other provisions
In accordance with IAS 37 (Provisions, Contingent Liabilities and Contingent Assets), and with IAS 19
(Employee Benefits) if applicable, other provisions allow for all identified obligations and anticipated losses, as
well as all uncertain liabilities, provided they are present obligations and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligations, and that reliable estimate can be made of the
amount of the obligation. A provision is only established for legal or constructive obligation against third parties.
Provisions are recognized at the amount which represents the best estimate of the expenditure required to settle
the present obligation. Any reimbursement is treated as a separate asset and accordingly is not offset against the
provision. Where the effect of the time value of money is material, the amount of the provision is the present value of
the expenditure expected to be required to settle the obligation. The present value is calculated using interest rates
that reflect current market assessments and the risks specific to the liability.
Contingent liabilities
Contingent liabilities are possible obligations that arise from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the enterprise or that represent a present obligation that arises from past events but is not recognized
because it is not probable that an outflow of resources will be required to settle the obligation or the amount of the
obligation cannot be measured with sufficient reliability. Unless the possibility of any outflow in settlement is
remote a description of the nature of the contingent liability is provided.
Presentation of the consolidated statement of financial position and consolidated statement of income
Individual items have been combined in the consolidated statement of financial position and the consolidated
statement of income; further information is provided separately in the notes to the consolidated financial statements.
Assets that will be realized within twelve months of the reporting date, as well as liabilities that will be settled
within one year of the reporting date, are classified as current.
The consolidated statement of income is prepared according to the nature of expense method.
Use of estimates
The preparation of the consolidated financial statements requires the Klöckner & Co Group to make
assessments, estimates and assumptions influencing the application of accounting policies in the Group and the
reporting of assets, liabilities, income and expenses. The actual amounts may differ from these estimates. The
estimates and the underlying assumptions are reviewed on an ongoing basis. Adjustments to estimates are
recognized in the period in which the estimate is revised, if the change affects only that period or in the period
of the revision and subsequent periods if more than one period is affected.
Estimates are particularly necessary for the valuation of intangible assets (e.g. in purchase price allocations),
the recognition and measurement of deferred tax assets, the accounting for pension and other obligations as well as
for impairment tests in accordance with IAS 36.
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New accounting standards and interpretations
In 2009 the Group initially applied IAS 1 rev. 2008 (Presentation of Financial Statements), IFRS 3 (Business
Combinations) and IAS 27 (Consolidated and Separate Financial Statements), IAS 23 (Borrowing Cost), IFRS 7
(Financial Investments: Disclosure), IFRS 8 (Operating Segments) and the interpretations IFRIC 14 (The Limit on a
Defined Benefit Asset, Minimum Funding Requirements and their Interaction) and IFRIC 16 (Hedges of a Net
Investment in a Foreign Operation).
As a result of the application of IAS 1 rev. 2008 the consolidated financial statements now also comprise a
statement of recognized income and expenses.
In January 2008, the IASB published revised versions of IFRS 3 (Business Combinations) and IAS 27
(Consolidated and Separate Financial Statements). Significant changes from the previous standards relate among
other things to the recognition and measurement of assets and liabilities acquired in a business combination, the
calculation of goodwill, the treatment of acquisition-related cost, the presentation of contingent considerations and
the treatment of changes in controlling interests after the achievement of control. Given that the Group temporarily
suspended its acquisition strategy the initial application did not have an effect on the consolidated financial
statements.
The application of the revised IFRS 7 resulted in additional notes disclosure.
Under IFRS 8, operating segments are based on the internal reporting organization (“Management
Approach”). The initial application did not result in changes in the segmentation of the Group.
Under IAS 23, borrowing costs that are directly attributable to the acquisition, construction or manufacture of a
qualifying asset must be capitalized. The initial application of the revised standard did not have a material effect on
the Group’s financial statements.
IFRIC 14 provides general guidance on how to access the limit in IAS 19 on the amount of the surplus of a
pension plan that can be recognized as an asset. The initial application resulted in adjustments to the asset
recognized for the Swiss pension plans. In accordance with the transition provisions of IFRIC 14 the application was
made retrospectively. The comparative amounts for 2008 have been restated as follows:
As previously
reported
Initial
application of
IFRIC 14 As restated
(E thousand)
Balances as of January 1, 2008
Excess of pension assets and Swiss employer contribution
reserves ........................................... 5,349 7,641 12,990
Deferred tax liabilities .................................. 82,364 1,605 83,969
Equity attributable to shareholders of Klöckner & Co SE ......
Balances as of December 31, 2008
Excess of pension assets and Swiss employer contribution
760,641 6,036 766,677
reserves ........................................... 4,804 8,787 13,591
Deferred tax liabilities .................................. 85,028 1,845 86,873
Equity attributable to shareholders of Klöckner & Co SE ...... 1,062,412 6,942 1,069,354
Personnel expenses ..................................... 546,272 (255) 546,017
Income taxes ......................................... 79,254 54 79,308
Net income attributable to shareholders of Klöckner & Co SE ..
Earnings per share (E/share)
398,134 201 398,335
— basic ........................................... 8.56 0.00 8.56
— diluted .......................................... 8.11 0.00 8.11
IFRIC 16 (Hedges of a Net Investment in a Foreign Operation) addresses the question of which risks are
eligible for hedge accounting under IAS 39. The initial application of the interpretation had no impact on
Klöckner & Co’s consolidated financial statements.
In addition the International Accounting Standards Board (IASB) and IFRIC have issued the following
standards and interpretations that are applicable for the Group but whose application is not yet mandatory in the
reporting period. The application of the standards and interpretations is subject to endorsement by the EU, which for
certain standards and interpretation is yet outstanding. Further standards and interpretations issued during the
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eporting period which are not further discussed in the following paragraphs will not have an impact on the Group’s
financial statements.
In April 2009 the IASB issued the second omnibus standard “Improvements to IFRSs” which comprises
adjustments to ten standards and two interpretations. Unless otherwise noted the adjustments are binding for fiscal
years beginning on or after January 1, 2010. Klöckner & Co does not expect that these changes will have a
significant impact on the Group’s consolidated financial statements.
The changes to IFRS 2 (Share-based Payment — Group Cash-settled Share-based Payment Transactions)
issued in June 2009 which classifies the application of IFRS 2 for cash-settled transactions in the individual
financial statements of consolidated subsidiaries will not have a significant impact on the Group’s consolidated
financial statements.
In November 2009 the IASB issued IFRS 9 (Financial Instruments) on classification and measurement of
financial instruments. The release marks the first part of a three-phase project to replace IAS 39 (Financial
Instruments: Recognition and Measurement). IFRS 9 introduces new regulations for the classification and
measurement of financial assets. The standard is to be applied for fiscal years beginning on or after January 1,
2013. Klöckner & Co is currently evaluating the impact on the standard of its consolidated financial statements.
In November 2009 the IASB issued changes to IFRIC 14 (The Limit of a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction). The amendment “Prepayment of a Minimum Funding Requirement”
which is limited to certain instances in which an entity is subject to minimum funding requirements and issues
prepayments which fulfill these requirements. The amendment now permits the recognition of the economic
benefits of such payments as an asset. The revised interpretation must be applied in fiscal years beginning on or after
January 1, 2011. Klöckner & Co currently assesses the impact of the revised interpretations on its consolidated
financial statements.
(5) Acquisitions and disposals
The Group structure changed as a result of the following acquisitions and disposals in financial years 2009 and
2008.
Acquisition activity in 2009
On November 11, 2009 the Group reestablished its acquisition strategy by signing a preliminary agreement for
the acquisition of the Becker Stahl-Service Group with headquarters in Bönen, Germany. The Becker Stahl-Service
Group operates one of the largest and most modern steel service centers in the world. The group has around 460
employees and generated sales of about A600 million in the 2008/2009 fiscal year ending September 30, 2009. It is
expected that the transaction will be concluded in the first quarter of 2010.
Acquisitions 2008
Taylor Equipment and Machine Tool Corporation
In April 2008, Klöckner & Co entered into an agreement to acquire the operating assets of the distribution
company Taylor Equipment and Machine Tool Corporation (Temtco), headquartered in Louisville, Mississippi,
USA. The acquisition is deemed to be a material business combination under IFRS 3. The activities have been
included in the Group’s consolidated financial statement since closing on May 5, 2008.
The effects of the purchase price allocation were as follows:
Carrying amounts and fair values
as of initial consolidation date
Carrying amount Adjustments Fair value
(E million)
Assets
non-current ........................................ 3.4 57.2 60.6
thereof goodwill .................................... 0.0 9.3 9.3
current ........................................... 75.6 5.1 80.7
Liabilities and provisions
current ........................................... 18.9 0.0 18.9
Acquired net assets ................................... 60.1 62.3 122.4
Purchase price. ...................................... 122.4
thereof paid in cash and cash equivalents .................. 122.4
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Other acquisitions in 2008
In January 2008, the transaction to acquire a controlling stake of 77.3% from 7.3% previously held in
Metalsnab Holding AD (Metalsnab), Sofia, Bulgaria, was completed. The name of the company was subsequently
changed to Klöckner Metalsnab AD, Sofia, Bulgaria. Metalsnab has been included in the consolidated financial
statements since January 1, 2008. After control was obtained the Group acquired further stakes of 22.5% in the third
quarter of 2008. With 99.8% the Group now holds almost the entire shares of the company.
Also in January 2008, Klöckner & Co acquired 100% of the shares in Multitubes Ltd. (Multitubes), Brierley
Hill, West Midlands, United Kingdom. The company was initially consolidated on January 1, 2008.
By agreement of May 21, 2008, Sherex Industries Ltd. (Sherex), New York, USA, was acquired. Sherex was
part of the disposed Koenig Verbindungstechnik AG, Dietikon, Switzerland (KVT Group).
The carrying amounts and fair values at the date of the other acquisitions were as follows:
Carrying amounts and fair values
as of initial consolidation date
Carrying amount Adjustments Fair value
(E million)
Assets
non-current ........................................ 14.0 0.9 14.9
thereof goodwill .................................... 0.0 0.9 0.9
current ........................................... 18.1 2.2 20.3
Liabilities and provisions
non-current ........................................ 1.5 0.0 1.5
current ........................................... 12.4 0.9 13.3
Acquired net assets ................................... 18.2 2.2 20.4
Non-controlling interests ................................ 4.0 0.0 4.0
Excess of net assets over purchase price .................... (1.2)
Purchase prices ...................................... 15.2
thereof paid in cash and cash equivalents .................. 15.2
Acquisition of non-controlling interests and other changes in controlling interests
2009
By shareholder resolution dated July 15, 2009, the registered capital of Klöckner Distribution Industrielle S.A.
(KDI) was increased. The non-controlling investor did not participate in the capital increase, thereby increasing
Klöckner & Co Verwaltung’s interest to 96.77% (2008: 90.0%).
2008
In the first half of 2008 the Group increased its holdings in Debrunner Koenig Holding AG, St. Gallen,
Switzerland (DKH) by 22.0% to now 100% at a purchase price of A126.7 million.
Disposals
2009
On August 19, 2009 the Group disposed of its investment in Klöckner Information Services GmbH to thirdparty
investors. The disposal resulted in a gain of approximately A2.5 million which is included in other operating
income. The purchase price was settled by offsetting with existing liabilities.
2008
With effect of July 2008 the sale of the Canadian subsidiary Namasco Ltd. was completed, the primary
business of which is the processing of flat-rolled metal products for the North American automotive industry.
In September 2008 the Group disposed of its interests in the Koenig Verbindungstechnik AG group (KVT).
KVT’s business activity is concentrated in the markets of fastening systems and sealing plugs.
The 2008 disposals resulted in disposal gains of approximately A273.4 million which are largely attributable to
the sale of KVT.
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Notes to the consolidated statement of income
(6) Specific items recognized in net income
In addition to the gain on sale of KIS (see Note 5 Acquisitions and disposals) the Group’s net income is
impacted by the following special items:
Reduction of antitrust fine KDI
On January 19, 2010 the French court of appeal greatly reduced the fine on KDI S.A.S. imposed by the French
antitrust authority in 2008 from A169.3 million to A23.5 million. The adjustment of the provision and the related
compensation claim against previous owners resulted in additional, non-recurring income of A79 million in 2009
which is largely presented as other operating income. Further details are provided in Note 35 Subsequent events.
Fees incurred with the restructuring of the financing arrangements
The terms of the Multi-currency revolving credit facility and European ABS program were restructured in the
second quarter (see Note 25 Financial liabilities). Expenses incurred in regard to the restructuring of the facilities
amounted to approximately A8 million and are presented in the financial result.
Impairment losses of the cash-generating units Spain and United Kingdom
As a result of the impairment tests performed on cash generating units (CGU) in the fourth quarter 2009
goodwill impairment charges were made of approx. A7.9 million for goodwill of the CGUs’ Spain (A4.7 million)
and United Kingdom (A3.2 million) as well as for property, plant and equipment and investment property of the
CGU Spain of approx. A33.0 million as their value in use and their fair value less cost to sell were lower than their
carrying values. This is largely due to the adverse local market developments and as a result lower earnings
expectations which are reflected in the planning process. For the CGU Spain this was primarily triggered by the
development of the construction sector. See also Note 15 Intangible assets, property, plant and equipment and
investment property.
(7) Sales
The Group’s sales are broken down by region as follows:
2009 2008
(E thousand)
Germany ......................................................... 749,704 1,462,369
EU excluding Germany .............................................. 1,678,944 2,861,410
Rest of Europe. .................................................... 669,767 901,318
North America ..................................................... 673,460 1,379,522
Central and South America ........................................... 23,266 19,054
Asia/Australia ..................................................... 18,761 26,669
Africa . . ......................................................... 46,591 99,253
Sales ............................................................ 3,860,493 6,749,595
(8) Other Operating Income
2009 2008
(E thousand)
Reduction of antitrust fine KDI ........................................... 80,172 —
Reversal of provisions .................................................. 10,520 8,138
Foreign currency exchange gains .......................................... 5,898 23,448
Global Settlement Balli ................................................. — 38,718
Gain on sale of consolidated subsidiaries .................................... 2,496 273,445
Gain on sale of non-current assets and assets held for sale ....................... 7,238 4,833
Income from written-off receivables . . . ..................................... 5,550 3,886
Rental income ........................................................ 4,274 4,349
Excess of net assets over purchase price in business combinations ................. — 1,198
Other income ........................................................ 11,211 13,167
Other operating income ................................................ 127,359 371,182
F-86

The reduction of the antitrust fine against KDI (see also Note 6 Specific items recognized in net income)
resulted in gains of approximately A80 million. Including effects of the accretion of approximately A1 million of the
provision and the related compensation claim against former shareholders, the net gain in 2009 amounted to
A79 million.
Gain on sale of consolidated subsidiaries relate to the sale of KIS. The prior year amount is primarily
attributable to the sale of KVT. For further details refer to Note 5 Acquisitions and disposals.
Other income comprises A1,565 thousand (2008: A1,847 thousand) excess customer payments for which the
statute of limitation has been exceeded or credits which are not offset from/to customers and uncharged supplier
deliveries and services as well as several income items each in the amount of less than A1.5 million. Foreign
currency exchange gains and losses resulting from the prolongation of Group internal financial receivables or
financial liabilities are presented on a net basis as other income or other expenses. As such foreign currency
exchange gains of A7,091 thousand (2008: A7,497 thousand) and foreign currency exchange losses of A8,839
thousand (2008: A6,109 thousand) have been offset against each other.
(9) Cost of materials
2009 2008
(E thousand)
Cost of materials, supplies and purchased merchandise ....................... 3,201,301 5,387,035
Cost of purchased services ............................................ 5,529 7,382
Cost of materials .................................................. 3,206,830 5,394,417
(10) Personnel expenses
2009 2008 *)
(E thousand)
Wages and salaries .................................................... 349,581 448,669
Social security contributions (including welfare benefits) ........................ 73,775 84,707
Retirement benefit cost ................................................. 17,828 12,641
Personnel expenses ................................................... 441,184 546,017
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
The reduction of personnel expenses is due to the lay-offs initiated in 2009 and lower bonuses.
The majority of the personnel expenses relate to remuneration, which comprises wages, salaries, compensation
and all other remuneration for work performed by employees of the Group in the financial year. The mandatory
statutory contributions to be borne by the Company, including in particular social security contributions, are
reported under social security contributions.
Retirement benefit expenses relate to active and former staff or their surviving dependents. These expenses
include net periodic pension costs, employer contributions to supplementary occupational pension plans and
retirement benefit payments by the Company for its employees.
In 2009, the following average staff was employed in the Klöckner & Co Group:
2009 2008
Salaried employees ....................................................... 5,256 5,814
Wage earners ........................................................... 3,892 4,591
Apprentices ............................................................ 254 276
9,402 10,681
F-87

(11) Other operating expenses
2009 2008
(E thousand)
Forwarding cost. ...................................................... 83,926 111,303
KDI antitrust case ..................................................... — 79,300
Rental and leasing expenses. ............................................. 68,752 69,873
Repair and maintenance ................................................. 35,342 50,470
Third-party services .................................................... 34,987 38,661
Supplies ............................................................ 37,022 49,252
Audit fees and consulting ............................................... 22,936 20,508
Other taxes .......................................................... 22,595 23,830
Rescission of the sale of the Valencia premise ................................ — 18,215
Travel expenses ....................................................... 12,364 16,782
Postal charges and telecommunication . ..................................... 10,285 10,708
Bad debt expenses ..................................................... 14,595 11,731
Credit insurance ...................................................... 8,132 8,936
Other insurance ....................................................... 9,060 9,738
Advertising and representation expenses ..................................... 7,138 10,988
Foreign currency exchange losses. ......................................... 5,375 23,928
Other expenses ....................................................... 27,175 36,389
Other operating expenses .............................................. 399,684 590,612
Other expenses include fringe benefits, office materials, expenses arising from secondary business and
incidental bank charges.
(12) Financial result
2009 2008
(E thousand)
Income from non-current securities and long-term loans. ......................... 13 16
Other interest and similar income .......................................... 8,993 6,965
Interest and similar expenses. ............................................. (62,173) (68,731)
Interest cost for post-employment benefits .................................... (8,532) (8,032)
Financial result ....................................................... (61,699) (69,782)
The financial result is impacted with expenses of approximately A8 million resulting from the restructuring and
stabilization of the financing agreements as outlined in Note 25 Financial liabilities.
(13) Income taxes
a) Income taxes in the income statement
The income taxes comprise current and deferred taxes.
The utilization of tax loss carryforwards resulted in increased income tax expense of A2,161 thousand (2008:
A6,374 thousand) in 2009 due to the corresponding release of deferred tax assets. In 2009 no benefits were
recognized for the first time recognition of deferred tax assets on loss carryforwards (2008: A2,452 thousand).
Valuation allowances for deferred tax assets on loss carryforwards resulted in deferred tax expense of A7,973
thousand (2008: A0 thousand)
Current taxes of A13 thousand (2008: A850 thousand) related to prior periods.
F-88

Income tax benefit/expense for the Klöckner & Co Group are broken down as follows:
2009 2008 *)
(E thousand)
Current income tax benefit/expense ........................................ (32,535) 77,774
Expense (domestic) ..................................................... 998 737
Income/expense (foreign) ................................................. (33,533) 77,037
Deferred tax benefit/expense ............................................. (21,633) 1,534
Expense/benefit (domestic). ............................................... 3,269 (1,845)
Income/expense (foreign) ................................................. (24,902) 3,379
Income tax benefit/expense .............................................. (54,168) 79,308
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
The combined income tax rate amounts unchanged to 30.7%, comprising the corporate income tax (including
solidarity surcharge) of 15.8% and trade tax Klöckner & Co of 14.9%.
The expected tax benefit/expense is reconciled to the actual tax benefit/expense as follows:
2009 2008 *)
(E thousand)
Expected tax rate ..................................................... 30.70% 30.70%
Income before taxes .................................................. (239,832) 463,482
Expected tax benefit/expense at domestic tax rate ............................. (73,628) 142,289
Foreign tax rate differential ............................................. (5,254) (28,934)
Tax effects related to KDI antitrust fine .................................... (27,103) 30,106
Tax rate changes ..................................................... (1,175) (886)
Reduced tax rate ..................................................... (287) —
Tax reduction due to tax free income ...................................... (4,694) (57,167)
Tax increase due to non-deductible expenses ................................. 5,799 15,665
Current income tax levied for prior periods ..................................
Goodwill impairment and excess of net assets over purchase price in business
13 850
combinations ......................................................
Tax reduction due to first-time recognition of deferred tax assets on temporary
267 (368)
differences and on loss carryforwards related to prior periods. ..................
Tax benefit resulting from previously unrecognized deferred tax assets on loss
(4,189) (5,626)
carryforwards and on temporary differences. ............................... (1,283) (18,793)
Tax increase due to non-capitalization of deferred tax assets on loss carryforwards. .... 57,520 1,956
Other tax effects. ..................................................... (154) 216
Effective income tax benefit/expense ..................................... (54,168) 79,308
Effective tax rate .................................................... (22.59)% 17.11%
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
b) Taxes recognized directly in equity
Current and deferred taxes are generally recognized as income or expense and are included in the net profit or
loss for the period, except to the extent that the tax arises from a transaction or event which is recognized, in the
same or a different period, directly in equity.
Taxes recognized in equity amounted to A�3,602 thousand (2008: A8,113 thousand).
F-89

c) Deferred tax assets and liabilities
Deferred tax assets and liabilities are presented in the consolidated statement of financial position as follows:
December 31,
2009
December 31,
2008 *)
(E thousand)
Deferred tax assets ............................................... 38,355 46,491
Deferred tax liabilities ............................................ 71,029 86,873
Deferred taxes, net .............................................. (32,674) (40,382)
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
ASSETS
Deferred tax assets and liabilities arise from the following:
December 31,
2009
(E thousand)
December 31,
2008 *)
From temporary differences and consolidations .......................... 28,882 34,878
Intangible assets ............................................... 2,803 2,147
Property, plant and equipment ..................................... 257 (1,138)
Inventories ................................................... 3,707 6,739
Provisions for pensions and similar obligations ........................ 8,279 7,023
Other provisions and accrued liabilities .............................. 3,125 4,227
Liabilities .................................................... 8,887 15,697
Other items. .................................................. 1,824 183
Tax loss carryforwards **)
.......................................... 9,473 11,613
Deferred tax assets .............................................. 38,355 46,491
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
**) Including interest carryforward.
EQUITY AND LIABILITIES
December 31,
2009
December 31,
2008 *)
(E thousand)
From temporary differences and consolidations .......................... 71,029 86,873
Intangible assets ............................................... 3,907 4,948
Property, plant and equipment ..................................... 32,915 40,831
Financial assets ................................................ (512) (550)
Inventories ................................................... 18,228 19,753
Receivables and other current assets ................................ 6,531 8,721
Provisions for pensions and similar obligations ........................ (5,337) (3,746)
Other provisions and accrued liabilities .............................. 16,195 15,131
Other items. .................................................. (898) 1,785
Deferred tax liabilities ........................................... 71,029 86,873
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
A deferred tax asset for unused tax losses is only recognized if it is probable that this benefit can be realized.
Unused tax loss carryforwards as of the reporting date amount to A353.3 million (2008: A216.4 million) for
corporate income tax losses of foreign and domestic entities and trade tax and similar losses of A227.2 million
(2008: A120.2 million). Corporate income tax losses incurred by foreign and domestic subsidiaries of A327.5 million
(2008: A184.8 million) and trade tax and similar losses of A197.3 million (2008: A90.9 million) were not recognized
because it is not probable that they will be used.
The major part of the loss carryforwards does not expire under the current tax regulations, unless specific
circumstances arise (e.g. change of control). To the extent loss carryforwards do expire, this will largely not occur
prior to 2014.
Consistent with deferred tax assets for loss carryforwards a deferred tax asset is recognized for all deductible
temporary differences to the extent that it is probable that taxable profit will be available against which the
F-90

deductible temporary difference can be utilized. The initial recognition of deferred tax assets of deductible
temporary differences resulted in tax benefits of A4,161 thousand (2008: A3,724 thousand).
Deferred tax assets were not recognized for temporary differences amounting to A59.9 million (2008:
A85.5 million) at December 31, 2009, as is not probable that the benefits can be realized.
Unrecognized deferred tax assets are as follows:
December 31,
2009
December 31,
2008 *)
(E thousand)
Temporary differences ............................................ 18,397 26,255
Unused tax losses ................................................ 84,317 43,176
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
d) Current tax
Tax receivables of A83,862 thousand (2008: A29,388 thousand) were recorded in the consolidated statement of
financial position for expected tax refunds. Of this amount A40,881 thousand (2008: A9,939 thousand) are
attributable to tax refunds resulting from the deduction of witholding taxes on dividends including solidarity
surcharge. The remainder is due to refunds resulting mainly from tax loss carrybacks.
The income tax payables comprise liabilities of A40,884 thousand (2008: A1,269 thousand), when the payment
obligation is nearly certain, and provisions of A9,804 thousand (2008: A17,920 thousand), when uncertainty exists
concerning the amount or the date of payment.
(14) Earnings per share
Earnings per share are calculated by dividing net income attributable to shareholders by the weighted average
number of shares outstanding during the period including the effects of the rights issue in the third quarter. In
accordance with IAS 33.41 7,615 potential dilutive shares of the convertible bonds have not been included in the
computation of diluted earnings per share for 2009 as this would have resulted in a lower loss per share. In 2008 the
diluted earnings per share computation was based on 4,025 potential dilutive shares of the 2007 convertible bond.
2009 2008 *)
Net income attributable to shareholders of Klöckner & Co SE (A thousand) .......... (188,484) 398,335
Weighted average number of shares (thousands of shares) ....................... 52,269 46,500
Basic earnings per share (E/share) ....................................... (3.61) 8.56
Diluted earnings per share (E/share) ..................................... (3.61) 8.11
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
F-91

Notes to the consolidated statement of financial position
(15) Intangible assets, property, plant and equipment and investment property
a) Intangible assets
Licenses,
similar
rights and other
intangible
assets Software Goodwill
Total
intangible
assets
Cost as of January 1, 2008 ........................ 118,939
(E thousand)
16,417 91,218 226,574
Accumulated amortization and impairments ............ (17,390) (11,603) — (28,993)
As of January 1, 2008. ........................... 101,549 4,814 91,218 197,581
Exchange rate differences .......................... 6,558 (6) 2,452 9,004
Changes in the scope of consolidation. ................ 38,970 (796) 10,888 49,062
Additions ...................................... 15 4,831 — 4,846
Disposals ...................................... — (151) — (151)
Depreciation and amortization ...................... (22,797) (1,614) — (24,411)
Transfers ...................................... (30) 30 — —
As of December 31, 2008 ......................... 124,265 7,108 104,558 235,931
Cost as of December 31, 2008 ...................... 161,024 18,619 104,558 284,201
Accumulated amortization and impairments ............ (36,759) (11,511) — (48,270)
Balance as of January 1, 2009 ..................... 124,265 7,108 104,558 235,931
Exchange rate differences .......................... (2,468) — (2,190) (4,658)
Changes in the scope of consolidation. ................ (6) (106) — (112)
Additions ...................................... 96 1,807 — 1,903
Disposals ...................................... — (126) (1,374) (1,500)
Depreciation, amortization and impairments ............ (25,907) (2,759) (7,913) (36,579)
Transfers ...................................... 161 (161) — —
Balance as of December 31, 2009 ................... 96,141 5,763 93,081 194,985
Cost as of December 31, 2009 ...................... 157,799 19,121 93,125 270,045
Accumulated amortization and impairments ............ (61,658) (13,358) (44) (75,060)
Goodwills in the amount of A82.004 thousand relate to the segment North America.
As a result of the impairment tests performed on cash generating units (CGU) in the fourth quarter 2009
goodwill impairments were made for the goodwill of the CGUs’ Spain (A4.7 million) and United Kingdom
(A3.2 million) as their value in use and their fair value less cost to sell were lower than their carrying values. This is
largely due to the adverse local market developments and as a result lower earnings expectations which are reflected
in the planning process. For the CGU Spain this was primarily triggered by the development of the construction
sector, which is deemed to be adversely affected for the foreseeable future.
Key assumptions used by management in determining the value in use or the fair value less cost to sell
comprise the assessment of expected future gross profit, expected inflations and discount rates. The assumptions are
based both on historical data and expected market developments.
For the reporting period pre-tax discount rates between 10.65% and 13.42% depending on the respective cash
generating unit were used. To monitor potential impairment exposure the Group performs simulations using higher
discount rates. Based on such simulations even a 0.5 percent point increase in the respective discount rate will
trigger additional goodwill impairments of A18.2 million. Management, however, does not expect that negative
changes in the material assumptions will occur.
F-92

) Property, plant and equipment
Land, similar
land
rights and
buildings
Technical
equipment
and machinery
Other equipment,
operating and
office equipment
Construction
in progress
Total
property,
plant and
equipment
Cost as of January 1, 2008 ..........
Accumulated amortization and
632,174 216,741
(E thousand)
209,574 14,778 1,073,267
impairments ................... (280,978) (149,775) (160,376) — (591,129)
As of January 1, 2008 ............. 351,196 66,966 49,198 14,778 482,138
Exchange rate differences ........... 7,264 (760) 2,252 367 9,123
Changes in the scope of consolidation . . (3,133) 1,076 (1,427) 43 (3,441)
Additions ....................... 6,939 12,125 12,452 11,414 42,930
Disposals ....................... (2,971) (515) (1,049) (70) (4,605)
Depreciation and amortization ........ (16,654) (13,694) (12,593) — (42,941)
Transfers ....................... 5,818 7,716 3,604 (17,138) —
Reclassification to assets held for sale . . (3,783) — — — (3,783)
As of December 31, 2008. .......... 344,676 72,914 52,437 9,394 479,421
Cost as of December 31, 2008. .......
Accumulated amortization and
636,104 225,779 216,873 9,514 1,088,270
impairments ................... (291,428) (152,865) (164,436) (120) (608,849)
Balance as of January 1, 2009. ...... 344,676 72,914 52,437 9,394 479,421
Exchange rate differences ........... 441 398 (207) (22) 610
Changes in the scope of consolidation . . (45) — (1,089) — (1,134)
Additions ....................... 4,306 6,930 5,583 5,925 22,744
Disposals .......................
Depreciation, amortization and
(1,211) (812) (1,816) (26) (3,865)
impairments ................... (39,949) (18,559) (13,038) — (71,546)
Transfers ....................... 3,348 3,052 3,596 (9,996) —
Reclassification to assets held for sale . . (79) — — — (79)
Balance as of December 31, 2009 .... 311,487 63,923 45,466 5,275 426,151
Cost as of December 31, 2009. ....... 638,086 234,651 218,649 5,396 1,096,782
Accumulated amortization and
impairments ................... (326,599) (170,728) (173,183) (121) (670,631)
Property, plant and equipment with a carrying amount of A78,058 thousand (2008: A120,032 thousand) have
been used as collateral to secure borrowings of the Group.
In 2009 the Group recognized impairment losses of A31,599 thousand (2008: A0 thousand) for real estate,
machines and other equipment of the CGU Spain, as their carrying amount exceeded the recoverable amounts. As
part of the initial purchase price allocation of the Group in 2005 excess fair values of land and buildings were
allocated to the segment Headquarters. As such impairment losses of A12.4 million were allocated to the segment
Europe and the remainder of A19.2 million to the segment Headquarters.
F-93

Assets held under finance leases
The Group holds various assets under finance leasing contracts. As of the reporting date, the carrying amounts
of capitalized assets were as follows:
Carrying amounts
December 31, December 31,
2009
2008
(E thousand)
Real estate
Spain (Valencia, Catalayud, Epila) .................................. 11,174 11,414
Austria (Vienna, Neumarkt) ....................................... 1,690 1,949
Technical equipment and machinery .................................. 5,653 6,325
Vehicles ....................................................... 126 519
18,643 20,207
c) Investment property
Investment property is only related to land and buildings in Valencia.
(E thousand)
Cost as of December 31, 2008 . ................................................. 13,208
Accumulated amortization and impairments ......................................... (20)
Balance as of January 1, 2009. ................................................. 13,188
Depreciation, amortization and impairments. ........................................ (1,513)
Balance as of December 31, 2009 ............................................... 11,675
Cost as of December 31, 2009 . ................................................. 13,208
Accumulated amortization and impairments ......................................... (1,533)
Due to the ongoing negative development of the real estate prices in Spain the fair value of the premise
declined from A13.2 million to A11.7 million resulting in an impairment loss of A1.4 million. The fair value is based
on an external appraisal.
In 2009 rental income amounts to A27 thousand (2008: A20 thousand); operating expenses attributable to the
premise amounted to A7 thousand (2008: A15 thousand).
(16) Inventories
December 31,
2009
December 31,
2008
Raw materials and supplies .........................................
(E thousand)
14,132 30,807
Work in progress ................................................ 5,651 7,317
Finished goods and merchandise ..................................... 551,135 948,415
Advance payments ............................................... — 14,073
Inventories .................................................... 570,918 1,000,612
Of the inventories recognized as of December 31, 2009, A284,105 thousand (2008: A384,781 thousand) are
stated at net realizable values. Write-downs to the net realizable value amount to A70,951 thousand (2008: A102,453
thousand).
In addition to customary reservations of title, inventories with a carrying amount of A70,487 thousand (2008:
A74,328 thousand) serve as collateral for financial liabilities as of December 31, 2009 of A1,980 thousand (2008:
A3,349 thousand).
(17) Trade receivables
Trade receivables are generally invoiced in the local currency of the relevant Group company; in general export
receivables in foreign currencies are hedged.
The Klöckner & Co Group regularly sells trade receivables under two ABS programs. The trade receivables are
sold by the participating Group companies to two special-purpose entities (SPE). As the programs do not qualify for
F-94

derecognition under the requirements of IAS 39, the receivables are reported on the Group’s consolidated statement
of financial position.
The refinancing of the purchased receivables by the SPE is therefore reported in the consolidated financial
statements as loans due to the conduits.
The carrying amount of the receivables of the Group companies participating in the ABS programs as of
December 31, 2009 amounts to A293 million (2008: A605 million).
For further information to the ABS programs see Note 25 Financial liabilities.
The following table provides information on the extent of credit risks attributable to trade receivables:
Trade receivables
Of which not
overdue as of the
reporting
Of which
overdue by days as of the reporting date
date 1-30 days 31-60 days 61-90 days 91-120 days H 120 days *) Write-downs Carrying amount
(E thousand)
December 31,
2009
493,962 367,835 78,209 17,006 4,800 6,581 19,531 (29,696) 464,266
December 31,
2008
827,664 634,909 128,767 30,274 10,834 7,035 15,845 (29,046) 798,618
*) Also includes deductible of credit insured receivables. Prior amount adjusted to conform with current year presentation.
As of December 31, 2009 trade receivables in the amount of A4,655 thousand (2008: A3,903 thousand) of
entities that do not participate in the Group’s ABS-programs were used as collateral for bank loans.
(18) Other assets
December 31, 2009 December 31, 2008
Current Non-current Current Non-current
*)
(E thousand)
Reimbursement receivable against former shareholders from
KDI antitrust case ............................... 3,500 — 70,000 —
Receivables from insurance companies. ................. 7,299 — 6,386 —
Commission claims ................................ 20,232 — 25,435 —
Reinsurance claims for pension obligations .............. — 4,475 — 4,429
Prepaid pension cost ............................... — 19,294 — 19,720
Claims for other taxes .............................. 6,166 — 3,259 —
Prepaid expenses .................................. 5,591 480 4,242 428
Fair value of derivative financial instruments ............. 820 877 11,878 —
Miscellaneous other assets ........................... 22,232 1,610 20,645 9,755
Other assets ..................................... 65,840 26,736 141,845 34,332
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
Other current assets include deposits of A1,692 thousand (2008: A1,417 thousand) and creditors with debit
balances of A1,002 thousand (2008: A884 thousand). Other current assets are with A7,367 thousand attributable to
escrow receivables from the sale of Namasco Ltd., which were paid to Klöckner & Co upon expiration of the
warranty period on January 8, 2010.
As a result of the reduced KDI antitrust fine the corresponding compensation claim was adjusted accordingly.
Also see Note 35 Subsequent events.
(19) Liquid funds
Cash and cash equivalents predominantly include bank balances. As of the reporting date none of these funds
were restricted (2008: A3,105 thousand restricted as collateral for fair values of derivative financial instruments).
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(20) Non-current assets held for sale
Non-current assets held for sale include assets no longer used in operations. The amount of A79 thousand
(2008: A4,044 thousand) is attributable to land and buildings of the Europe segment and A784 thousand (2008: A739
thousand) to land and buildings and A218 thousand (2008: A159 thousand) to machinery, both of the America
segment.
The Swiss land and buildings classified as held for sale in 2008 were disposed of in 2009. The sale resulted in
disposal gains of A2.2 million.
(21) Equity and non-controlling interests
a) Subscribed capital
Effective with registration on September 18, 2009 the Company’s subscribed capital was increased from
A116,250,000 by A50,000,000 to A166,250,000. The increase from authorized capital was achieved by issuance of
20,000,000 non-par-value shares with a calculated pro rata share of the capital stock of A2.50 per share with full
dividend rights from January 1, 2009. Including the rights issue, a total of 66,500,000 shares are issued and
outstanding. The issue price for the new share amounted to A10.00 per share.
The new shares were offered to Klöckner & Co shareholders for subscription at a ratio of 7 : 3. Shareholders’
statutory subscription rights were excluded in relation to 71,429 shares to ensure an even subscription ratio.
By resolutions of the Annual General Meetings in 2007, 2008 and 2009 the Company’s share capital has been
conditionally increased in each case by up to A11,625,000 each by issue of up to 4,650,000 new non-par-value
shares that are entitled to profits from the beginning of the business year in which they are issued. The conditional
capital serves to grant subscription and/or conversion rights to the holders of option bonds and/or convertible bonds
that are issued by the Company or a Group company in accordance with the authority of the respective Annual
General Meeting of the Company.
In accordance with the information according to Sections 21 para. 1, 22 para. 1 Securities Trading Act
(WpHG — Wertpapierhandelsgesetz) the following shareholdings in Klöckner & Co SE were held at the date of
authorization of the financial statements:
Notifying institutions Domicile
Voting
interest
in percent
Increase over threshold
BlackRock Inc. ............................ NewYork, USA 5.61 a)
Franklin Mutual Advisers LLC ................. Short Hills, USA 9.89 a),b)
a) Attributed holding.
b) Information excluding dilutive effects of the rights issue in 2009.
Date on which
threshold was met
December 1, 2009
November 21, 2008
A full listing of notifications of increase or decrease, respectively, under threshold in accordance with
Section 21 para. 1 and Section 22 para. 1 Securities Trading Act (WpHG) is attached as appendix to the notes to the
consolidated financial statements.
b) Capital reserves
As of December 31, 2009 the capital reserves amount to A429,493 thousand (2008: A260,496 thousand). The
increase is with A143,134 thousand attributable to the premium received for the rights issue and with A25,863
thousand to the equity component of the convertible bond also issued in 2009.
Capital reserves are presented net of costs incurred in issuing the rights and, as far as related to the equity
component, the issuance cost associated with the convertible bond, are stated net of deferred taxes.
c) Retained earnings
Retained earnings include the accumulated undistributed earnings of the companies included in the consolidated
financial statements, to the extent that no distributions are made outside the Group, as well as effects on
equity from consolidation.
F-96

d) Accumulated other comprehensive income
Accumulated other comprehensive income comprises foreign currency translation adjustments resulting from
the translation of the financial statements of foreign subsidiaries and changes in the fair value of cash flow hedges,
net of deferred taxes.
e) Non-controlling interests
Non-controlling interests represent third party interest in consolidated subsidiaries.
The development of the individual components of consolidated equity and non-controlling interests for the
period from January 1, 2009 to December 31, 2009, and from January 1, 2008 to December 31, 2008, is shown in the
summary of changes in equity.
(22) Share-based payments
In 2006 the Group has established share-based payment programs. Eligible for share-based payment are
Management Board members as well as certain members of the senior management. The Group’s plans are cashsettled
virtual stock option plans.
Management Board programs
Under the Management Board programs a total of 667,800 virtual stock options are outstanding as of
December 31, 2009 (December 31, 2008: 858,000).
Management Board program 2006 as amended in 2009
Under the virtual stock option plan introduced in 2006 a total of 930,000 virtual options were allocated to the
Management Board. The program covers a five year-period in which equal annual tranches of 186,000 virtual stock
options are granted to the Management Board. The strike price for the first tranche has been set to the IPO price of
A16/share. The strike price for each subsequent tranche is increased by 5% over the previous year’s strike price. The
individual strike price is reduced by subsequent dividends and was adjusted to reflect dilutive effects of the rights
issue in 2009. The virtual stock options of each tranche become exercisable after 30 stock trading days after the
Annual General Meeting following the allotment of the respective tranche. Subsequently, the options of the relevant
tranches may be exercised in full or in part at any time. The amount to settle the obligation corresponds to the
difference between the average trading price of the last 30 trading days (XETRA trading, Deutsche Börse AG,
Frankfurt a. M.) prior to exercising the option and the respective strike price of the tranche. The settlement amount
is capped at a defined maximum amount.
In 2009 the conditions of the not yet allocated tranches were modified to account for the regulations of the Act
on the Appropriateness of Management Board Remuneration (VorstAG). The modifications primarily entail longer
waiting periods. Under the revised conditions the waiting periods for the initial third, the second and the remaining
third of a tranche amount to three, four and five years from the issue date, respectively.
Management Board program 2008
In connection with the enlargement of the Management Board, the Board program was amended in 2008 by
300,000 virtual stock options which will be issued in five annual tranches beginning business year 2009. The strike
price is based on the non-weighted average closing price of Klöckner & Co shares over the last 30 consecutive
trading days prior to issuance reduced by dividends attributable to the respective program term.
The virtual stock options of each tranche can be exercised after a 30-day trading period after the Annual
General Meeting of the allotment year of the respective tranche. Subsequently, the options of the relevant tranches
may be exercised in full or in part at any time.
Management Board program 2009
In light of the change of the Chairman of the Management Board, 232,500 virtual stock options were added to
the Board programs in 2009. The conditions of the new grants also account for extended waiting periods while the
remaining material conditions are largely identical to the 2008 Management Board program.
F-97

Senior management programs
In addition to the Management Board programs 115,500 (2008: 121,500) virtual stock options were granted to
certain members of the senior management throughout the Group during the first half year of 2009. The exercise
conditions are largely identical to the Management Board program with, however, lower maximum payouts for
certain members of senior management. Furthermore, for certain members of the senior management the strike
price calculation follows the calculation of the extended Management Board program. The programs do not account
for waiting periods over several years.
The total number of outstanding rights developed as follows:
(number of virtual stock options)
Management Board
programs Other executives Total
Outstanding at the beginning of the year .............. 858,000 76,500 934,500
Granted ........................................ 232,500 115,500 348,000
Exercised ....................................... (180,900) (7,000) (187,900)
Forfeited ....................................... (241,800) (5,000) (246,800)
Outstanding at the end of the year ................... 667,800 180,000 847,800
During the second half of 2009 187,900 (2008: 233,000) virtual stock options were exercised. Payments for
share-based compensation amounted to A982 thousand (2008: A3,421 thousand). The pro rata provision for sharebased
payments to the Management Board and senior management amounts to A2,850 thousand (December 31,
2008: A2,270 thousand) with total expense recognized in 2009 of A1,562 thousand (2008: A2,864 thousand).
To limit expenses and cash flows for the granted and approved further grants of virtual stock options until and
including financial year 2011 the Group entered into certain derivative financial instruments in January 2008. The
instruments are accounted for at fair value through profit or loss in accordance with IAS 39 (Financial Instruments:
Recognition and Measurement).
The positive fair value changes and settlement effects of these instruments amount to A5,368 thousand (2008:
expense A�8,468 thousand) and were offset against personnel expenses. The fair values of the financial instruments
are described in Note 30 Derivative financial instruments.
(23) Provisions for pensions and similar obligations
Various types of pension schemes have been established for most employees of the Group, depending on the
legal, economic and tax environment of the respective jurisdictions. Benefits provided are usually based on the
length of service and the employees’ salaries.
Benefits provided comprise of both defined contribution plans and defined benefit plans.
For defined contribution plans, the Company contributes funds to private or public pension institutions on the
basis of statutory or contractual requirements. With these payments the Company is discharged from all further
obligations. Defined contribution expenses in 2009 amounted to A17,726 thousand (2008: A20,615 thousand).
Included therein are employers’ contributions to the statutory pension schemes in the amount of A14,636 thousand
(2008: A16,240 thousand).
Most of the pension schemes are designed as defined benefit plans, either funded or unfunded.
The following actuarial assumptions were used in the actuarial calculations performed by third party actuaries:
Germany Austria Switzerland The Netherlands
%
United Kingdom France United States
Discount rate. ......... 5.10 5.10 3.50 5.10 5.75 5.10 5.97-6.10
Salary trend .......... 3.00 3.00 2.00 2.65 3.90-4.40 2.00 3.50
Pension trend ......... 2.00 2.25 0.50 1.50 3.50 1.25 *)
0.00
Expected return on plan
assets ............. 4.50 — 4.50 4.60 6.70-7.60 4.50 6.50
*) Depending on the respective pension plan.
Unchanged to the prior year, the Company uses Prof. Dr. Klaus Heubeck’s 2005 G biometric tables
(“Richttafeln”) to calculate its obligations under German pension plans. Such tables are widely recognized for
use in the measurement of company pension obligations.
F-98

The discount rate assumption reflects the rates available for high-quality fixed income investments during the
period to maturity of the benefit in the respective obligation. A uniform interest rate was used for the euro zone.
Expected returns on plan assets are calculated according to the allocation of plan assets. For investments in
equity securities, the yield reflects the observable performance in the individual countries and the respective
portfolio. The return on debt securities is derived from quoted prices of such securities. The expected return for real
estate investments depends on the marketability, which is determined by local market conditions and individual
contractual commitments.
The pension obligations of the German Group companies arising from defined benefit plans are largely
unfunded, whereas those of the foreign subsidiaries are predominantly funded.
In the reporting period the Group initially applied IFRIC 14. The effects of the applications are discussed in
Note 4 Significant accounting policies.
The defined benefit plans are structured as follows:
December 31,
2009
December 31,
2008 *)
(E thousand)
Defined benefit obligation of unfunded plans ............................ 149,992 144,897
Defined benefit obligation of fully or partly funded defined benefit plans ....... 465,592 420,078
Fair value of plan assets ........................................... (450,307) (398,319)
Unrecognized actuarial gains and losses ............................... (13,492) (10,410)
Unrecognized past service cost ...................................... 2,268 2,622
Amounts not recognized due to asset ceiling (IAS 19.58 (b)) . . . ............. 1,173 1,507
Fair value of the reimbursement rights. ................................ (4,397) (4,429)
Net amount recognized ........................................... 150,829 155,946
Thereof:
— Other assets in connection with pension obligations **) ................... 23,769 24,149
— Provisions for pensions and similar obligations ........................ 174,598 180,095
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
**) Also includes reimbursement rights recognized as assets.
The reconciliation of the defined benefit obligation is as follows:
2009 2008
(E thousand)
Defined benefit obligation as of January 1 ................................. 564,975 558,529
Service cost. ......................................................... 12,686 11,481
Interest cost. ......................................................... 27,055 25,596
Employee contributions ................................................. 18,098 15,785
Actuarial gains and losses ............................................... 25,137 (11,090)
Foreign currency exchange rate differences .................................. 2,244 15,403
Benefits paid ......................................................... (31,412) (30,085)
Past service cost ...................................................... 533 (339)
Change in scope of consolidation/other transfers. .............................. (2,723) (18,643)
Curtailments and settlements ............................................. (1,009) (1,662)
Defined benefit obligation as of December 31 ............................... 615,584 564,975
F-99

The fair values of the plan assets developed as follows:
2009 2008 *)
(E thousand)
Fair value of plan assets as of January 1. .................................. 398,319 469,971
Expected return ....................................................... 20,366 24,265
Employee contributions ................................................. 18,098 15,786
Employer contributions ................................................. 11,941 8,673
Actuarial gains and losses ............................................... 18,953 (98,618)
Foreign currency exchange rate differences .................................. 2,005 20,335
Benefits paid ......................................................... (21,576) (20,575)
Change in scope of consolidation/other transfers. .............................. 2,201 (21,518)
Fair value of plan assets as of December 31 ................................ 450,307 398,319
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
The current allocation of plan assets is as follows:
December 31,
2009
December 31,
2008 *)
(E thousand)
Shares ........................................................ 152,376 125,931
Bonds ........................................................ 156,682 137,680
Other assets .................................................... 40,844 36,282
Real estate ..................................................... 100,405 98,426
450,307 398,319
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
Plan assets do not comprise financial instruments issued by the plan sponsor; own-used real estate and other
assets used by the Company amounted to A11,768 thousand (2008: A11,117 thousand).
Changes in reimbursement rights were as follows:
2009 2008
(E thousand)
Reimbursement rights as of January 1 ....................................... 4,429 6,139
Expected return .......................................................... 201 197
Actuarial gains and losses .................................................. 66 (54)
Benefits paid ............................................................ (299) (8)
Changes in the scope of consolidation ......................................... — (1,845)
Reimbursement rights as of December 31 ..................................... 4,397 4,429
Reimbursement rights recognized contain life insurance policies and claims arising from other insurances
concluded to cover the relevant pension obligations.
F-100

Pension expenses consist of personnel expenses and interest expenses which are included in interest income,
net:
2009 2008 *)
(E thousand)
Service cost .......................................................... (12,686) (11,481)
Interest cost for funded plans ............................................. (18,523) (17,564)
Expected return on plan assets ............................................ 20,366 24,265
Expected return on reimbursement rights ..................................... 201 197
Actuarial gains and losses ................................................ (2,889) (60,643)
Past service cost ....................................................... (206) 640
Curtailments and settlements .............................................. 1,018 1,662
Effects of limitation of asset ceiling as per IAS 19.58 (b). ........................ 334 55,982
Interest cost for unfunded plans. ........................................... (8,532) (8,032)
Net periodic benefit expense for defined benefit plans ......................... (20,917) (14,974)
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
The actual gain on plan assets amounted to A39,319 thousand in 2009 (2008: loss A�74,367 thousand). The
actual return on reimbursement rights totaled A267 thousand (2008: A3 thousand).
The funded status of defined benefit plans is as follows:
2009 2008 *)
2007 2006
(E thousand)
Defined benefit obligation .............................. 615,584 564,975 558,529 607,487
Fair value of plan assets ............................... 450,307 398,319 464,622 434,395
Funded status ...................................... 165,277 166,656 93,907 173,092
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
In 2009, 2008 and 2007, experience adjustments to the present value of pension rights and the fair values of
plan assets were as follows:
2009 2008 *)
(E thousand)
Defined benefit obligation. ........................................ 8,871 (3,585) 2,428
Fair value of plan assets .......................................... 18,953 (98,363) 20,022
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
The employers’ contributions to the plan assets for the 2010 financial year are expected to be A11,467
thousand.
F-101
2007

(24) Other provisions
The provisions developed as follows:
As of
January 1,
2009 Additions Accretion **) Utilization
(E thousand)
Reversals
Other
changes *)
As of
December 31,
2009
Other taxes ...................
Personnel-related obligations
977 2,101 — (724) — 97 2,451
— early retirement schemes ....... 9,983 3,484 148 (4,817) (1,925) (670) 6,203
— anniversary payments ......... 12,844 — 47 (140) (2,879) (142) 9,730
— other ..................... 59 68 — (59) — — 68
Onerous contracts .............. 5,867 3,849 — (4,749) — (52) 4,915
Restructuring expenses .......... 10,716 10,008 — (9,925) (175) 3 10,627
KDI antitrust case .............. 169,300 — 1,781 (10,000) (147,581) — 13,500
Litigation and other risks ......... 15,229 2,022 — (1,383) (1,420) (14) 14,434
Miscellaneous provisions ......... 17,831 5,091 126 (6,136) (302) 92 16,702
242,806 26,623 2,102 (37,933) (154,282) (686) 78,630
Other accrued liabilities
Personnel-related obligations ...... 51,869 16,139 — (28,004) (2,849) (1,023) 36,132
Outstanding invoices ............ 25,334 14,736 — (13,829) (855) 265 25,651
Miscellaneous accrued liabilities . . . 1,681 806 — (1,613) (115) (17) 742
78,884 31,681 — (43,446) (3,819) (775) 62,525
Other provisions .............. 321,690 58,304 2,102 (81,379) (158,101) (1,461) 141,155
*) Change in scope of consolidation, foreign currency adjustments, reclassification and transfers to/from third parties.
**) The effects from accretion of the provision for the antitrust case resulted from the agreed long-term payment plan in the second quarter.
Reconciliation to balance sheet amounts:
December 31, 2009 December 31, 2008
Non-current Current Non-current Current
Other taxes .....................................
Personnel-related obligations
—
(E thousand)
2,451 — 977
— early retirement schemes ......................... 4,538 1,665 6,665 3,318
— anniversary payments ........................... 9,547 183 12,601 243
— other. ....................................... — 68 — 59
Onerous contracts ................................ 865 4,050 1,087 4,780
Restructuring expenses ............................ — 10,627 — 10,716
KDI antitrust case ................................ — 13,500 — 169,300
Litigation and other risks ........................... 9,903 4,531 10,382 4,847
Miscellaneous provisions ........................... 6,434 10,268 6,189 11,642
Other accrued liabilities
31,287 47,343 36,924 205,882
Personnel-related obligations ........................ — 36,132 — 51,869
Outstanding invoices .............................. — 25,651 — 25,334
Miscellaneous accrued liabilities ..................... — 742 — 1,681
— 62,525 — 78,884
Other provisions ................................ 31,287 109,868 36,924 284,766
The provision for onerous contracts is based on procurement and sale contracts for goods and other contractual
obligations.
F-102

The provisions for restructuring relate to obligations in respect of termination benefits granted in redundancy
programs and other restructuring expenses.
On January 19, 2010 the fine imposed by the French antitrust authority in 2008 was reduced from
A169.3 million to A23.5 million of which A10 million had already been paid by December 31, 2009. Accordingly,
the provision was adjusted to the remaining unpaid amount. Further details are provided in Note 35 Subsequent
events.
Miscellaneous provisions include an amount of A1,740 thousand (2008: A2,017 thousand) for compensation
payments to former employees of a subsidiary acquired in 2000 due to the insolvency of the relevant insurance
company. Furthermore, provisions for environmental remediation including decontamination and other risks are
included under this caption.
Accrued liabilities for employee-related obligations include bonus payments of A22,681 thousand (2008:
A35,023 thousand) and accrued vacation and accrued overtime of A12,035 thousand (2008: A15,022 thousand).
(25) Financial liabilities
The details of financial liabilities are as follows:
up to
1 year 1 – 5 years
December 31, 2009 December 31, 2008
over
five years Total
(E thousand)
up to
1 year 1 – 5 years
over
five years Total
Bonds .............
Liabilities due to
5,396 360,910 — 366,306 2,097 276,162 — 278,259
banks ............
Liabilities under ABS
44,517 230,613 — 275,130 42,985 317,927 — 360,912
programs . ........
Finance lease
65 20,659 — 20,724 524 209,962 — 210,486
liabilities . ........ 2,191 6,176 386 8,753 2,506 7,386 1,563 11,455
52,169 618,358 386 670,913 48,112 811,437 1,563 861,112
Financial liabilities of A24,710 thousand (2008: A28,424 thousand) are secured by mortgages. Furthermore,
inventories listed in Note 16 Inventories serve as collateral as well as trade receivables under the ABS programs.
Transaction costs that are directly attributable to the issue of financial liabilities in the amount of A5,977
thousand (2008: A6,312 thousand) were offset against the respective liabilities.
Bonds
On June 9, 2009 Klöckner & Co issued via its wholly owned Luxembourg subsidiary, Klöckner & Co Financial
Services S.A., a senior unsecured convertible bond with a nominal value of A97.9 million. Payments under the bond
are guaranteed by Klöckner & Co SE. The bond, which is convertible into existing or new shares of Klöckner & Co
SE, has a maturity of five years and a coupon of 6.0%. The initial conversion price was set at A21.06 (i.e. a 35%
premium over the share price). To allow for dilutive effects of the rights issue the conversion price was reduced to
A18.37. The bond cannot be called by the issuer for the first three years, and is callable thereafter when the stock
exchange price of Klöckner & Co’s shares (over certain periods) exceeds 130% of the conversion price. The
proceeds from the issuance will be used for general corporate purposes and at a later stage to continue the external
growth strategy.
For accounting purposes the bond was bifurcated into an equity and a liability component. The equity
component, net of issuance costs of A0.6 million, amounted to A25.9 million and was credited to capital reserves.
In July 2007, Klöckner & Co SE issued via its wholly owned subsidiary Klöckner & Co Finance International
S.A. a convertible bond with an aggregated nominal value of A325 million. Payments under the bond are guaranteed
by Klöckner & Co SE. The bond which is convertible into shares of Klöckner & Co SE has a maturity of five years
and a coupon of 1.5%. The conversion price was set at A80.75 which also was adjusted for the effects of the rights
issue in 2009 to A70.44. On December 4, 2009 the bond liability was transferred to Klöckner & Co Financial
Services S.A.
F-103

Liabilities due to banks
During the second quarter of 2009 the terms and conditions for the syndicated multi-currency revolving credit
facility were renegotiated. Performance covenants were replaced with balance-sheet-related covenants. As part of
the renegotiation the volume of the multi-currency revolving credit facility was reduced from A600 million to
A300 million. The term of the facility until May 10, 2011 remains unchanged.
Under the revised terms gearing (i.e. net financial debt divided by equity attributable to shareholders of
Klöckner & Co SE) may not exceed 150% and the equity attributable to shareholders of Klöckner & Co SE may not
decrease below A500 million. Violation of such financial covenants would not automatically result in an event of
default but would require repayment of all outstanding amounts. Subsequent drawings would then be available
when the covenants are again met.
Further liabilities due to banks exclusively comprise of bilateral borrowings of international subsidiaries,
which are primarily used to finance working capital.
Liabilities under ABS programs
Since July 2005, the Klöckner & Co Group has conducted a European ABS program with a term of five years.
The European program has a volume of A420 million. Also for the European ABS programs the covenants were
modified from performance-based to balance-sheet-related covenants. The US ABS program has a maximum
volume of USD 125 million (A87 million).
As of the end of the reporting period, utilization of the programs of A21 million including interest breaks down
as follows:
December 31, December 31,
2009
2008
(E million)
European program
— utilization ................................................... — 125
— maximum volume .............................................
American program
420 420
— utilization ................................................... 21 88
— maximum volume ............................................. 87 90
The utilization of the programs is recognized as loans given that the requirements for derecognition under
IAS 39 of the receivables transferred were not met.
In connection with the restructuring and stabilization of the syndicated loan and the European ABS-program
the Group incurred fees of A7.7 million which are included in the financial expenses.
F-104

Liabilities under finance leases
Liabilities from finance leases are carried at the present value of future lease payments which have the
following terms:
December 31, 2009 December 31, 2008
(E thousand)
Due within one year ....................................... 2,396 3,086
Due between one and five years .............................. 6,464 8,506
Due after five years ........................................ 390 1,636
Future minimum lease payments ............................ 9,250 13,228
Due within one year ....................................... 205 580
Due between one and five years .............................. 288 1,120
Due after five years ........................................ 4 73
Interest included in future minimum lease payments ............. 497 1,773
Due within one year ....................................... 2,191 2,506
Due between one and five years .............................. 6,176 7,386
Due after five years ........................................ 386 1,563
Present value of future minimum lease payments ................ 8,753 11,455
(26) Trade payables
December 31, 2009 December 31, 2008
(E thousand)
Advance payments received. ................................. 1,077 125
Trade payables ........................................... 375,778 360,838
Bills payable ............................................. 21,532 31,220
Trade payables .......................................... 398,387 392,183
(27) Other liabilities
December 31, 2009 December 31, 2008
Non-current Current Non-current Current
Liabilities due to entities in which participations are held. .... —
(E thousand)
431 — 37
Social security contributions .......................... — 8,724 — 10,857
Customers with credit balances ........................ — 10,934 — 14,770
Liabilities to employees ............................. — 2,447 — 6,600
Value-added tax liabilities ............................ — 11,487 — 19,688
Other tax liabilities ................................. — 5,266 — 16,570
Contingent consideration for business combinations ......... 1,817 — 3,874 —
Negative fair value of derivative financial instruments ....... 28,663 1,213 53,716 2,181
Miscellaneous other liablities ......................... 600 11,148 2,044 10,937
Other liabilities ................................... 31,080 51,650 59,634 81,640
Negative fair values of derivative financial instruments of A24,765 thousand (2008: A44,665 thousand) are
attributable to cross currency swaps and interest rate swaps designated as cash flow hedges for which fair value
changes are directly recognized in equity and thus do not effect net income.
Other information
(28) Information on capital management
The Group determines the amount of its capital in relation to risk. The capital structure is managed and, if
necessary, adjusted in line with changes in the economic environment. Options for maintaining or adjusting the
F-105

capital structure include adjusting dividend payments, capital repayments to shareholders, issuing new shares and
the sale of assets to reduce liabilities.
The capital management is based on gearing. Gearing is calculated as the ratio of net financial debt to equity
attributable to shareholders of Klöckner & Co SE as stated in the statement of financial position. Net financial debt
is calculated as the difference between financial liabilities (adjusted for transaction costs) and cash and cash
equivalents reported on the statement of financial position. The Group’s target is to maintain a gearing below 150%
in order to be able to obtain finance at reasonable conditions.
Gearing — based on consolidated equity attributable to shareholders of Klöckner & Co SE — is calculated as
follows:
December 31, 2009 December 31, 2008 *)
Variance
(E thousand)
Financial liabilities . . ............................ 670,913 861,112 (190,199)
Transaction cost ................................ 5,977 6,312 (335)
Liquid funds ................................... (826,517) (296,636) (529,881)
Net financial debt (before deduction of transaction
cost) ....................................... (149,627) 570,788 (720,415)
Equity attributable to shareholders of Klöckner & Co SE . . 1,108,195 1,069,354 38,841
Gearing ...................................... (14)% 53%
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
The improvement of the gearing ratio results primarily from the reduction of net working capital and the
proceeds from the rights issue.
The Company’s midterm goal is to achieve investment grade rating.
(29) Additional information for financial instruments
The carrying amounts and fair values by category of financial instruments are as follows:
Financial assets
as of December 31, 2009 Fair value
At fair value
through
profit or loss
IAS 39 measurement categories
Available
for sale
(E thousand)
Loans and
receivables
Not covered
by the scope
of IFRS 7
Total
carrying
amount as
of Dec. 31,
2009
Non-current financial assets
Financial assets . ............ 482 — 194 288 1,894 2,376
Other assets ................
Current financial assets
2,960 877 — 2,083 23,776 26,736
Trade receivables ............ 464,266 — — 464,266 — 464,266
Other assets ................ 58,552 820 — 57,732 7,288 65,840
Liquid funds . . . ............ 826,517 — 121 826,396 — 826,517
Assets held for sale .......... — — — — 1,081 1,081
1,352,777 1,697 315 1,350,765 34,039 1,386,816
F-106

Financial liabilities as
of December 31, 2009 Fair value
IAS 39 measurement categories
At fair value
through
profit or loss
Other
liabilities
(E thousand)
Carrying
amount
under
IAS 17
Not covered by
the scope of
IFRS 7
Total
carrying
amount as
of Dec. 31,
2009
Non-current financial liabilities
Financial liabilities ......... 653,647 — 612,182 6,562 — 618,744
Other liabilities ............
Current financial liabilities
31,080 3,898 27,182 — — 31,080
Financial liabilities ......... 52,169 — 49,978 2,191 — 52,169
Trade payables ............ 398,387 — 398,387 — — 398,387
Other liabilities ............ 26,172 1,213 24,959 25,478 51,650
1,161,455 5,111 1,112,688 8,753 25,478 1,152,030
Financial assets as
of December 31, 2008 Fair value
At fair value
through
profit or loss
IAS 39 measurement categories
Available
for sale
(E thousand)
Loans and
receivables
Not covered
by the scope
of IFRS 7
Total
carrying
amount as
of Dec. 31,
2008 *)
Non-current financial assets
Financial assets . ............ 789 — 410 379 1,575 2,364
Other assets ................
Current financial assets
9,946 1,446 — 8,500 24,386 34,332
Trade receivables ............ 798,618 — — 798,618 — 798,618
Other assets ................ 137,326 12,484 — 124,842 4,519 141,845
Liquid funds . . . ............ 296,636 — 105 296,531 — 296,636
Assets held for sale .......... — — — — 4,942 4,942
1,243,315 13,930 515 1,228,870 35,422 1,278,737
*) Comparative amounts for 2008 restated due to initial application of IFRIC 14 (see Note 4)
Financial liabilities as
of December 31, 2008 Fair value
IAS 39 measurement categories
At fair value
through
profit or loss
Other
liabilities
(E thousand)
Carrying
amount
under
IAS 17
Not covered
by
the scope
of IFRS 7
Total
carrying
amount as
of Dec. 31,
2008
Non-current financial liabilities
Financial liabilities ........... 733,762 — 804,051 8,949 — 813,000
Other liabilities .............
Current financial liabilities
59,619 9,051 50,568 — 15 59,634
Financial liabilities ........... 48,113 — 45,606 2,506 — 48,112
Trade payables .............. 392,183 — 392,183 — — 392,183
Other liabilities ............. 34,524 2,383 32,142 — 47,115 81,640
1,268,201 11,434 1,324,550 11,455 47,130 1,394,569
Fair values by fair value hierarchy levels
Financial assets measured at fair value
Fair value measurement at the end of the
reporting period using:
December 31,
2009 Level 1 Level 2 Level 3
(E thousand)
Derivative financial instruments ........................... 1,697 — 1,697 —
Total .............................................. 1,697 — 1,697 —
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Financial liabilities
measured at fair value
Fair value measurement at the end of the
reporting period using:
December 31,
2009 Level 1 Level 2 Level 3
(E thousand)
Derivative financial instruments ........................... 5,111 — 5,111 —
Total .............................................. 5,111 — 5,111 —
The fair values of current financial assets are largely identical to their carrying amounts. The fair values of
financial liabilities reflect the current market environment as of December 31, 2009 for the respective financial
instruments. The fair value is not reduced by transaction costs. For current financial liabilities for which no
transaction costs are to be considered, the carrying amount approximates fair value.
Net income by measurement categories
Cash and cash equivalents, trade receivables and other receivables predominantly are of short term maturity.
Therefore, the carrying amounts at the reporting date closely approximate fair values.
Net income for the measurement category loans and receivables consists of foreign currency exchange gains
and losses, impairments and write-offs, recoveries on impaired receivables and compensation by and fees for credit
insurance. In financial year 2009, a net loss of A18,291 thousand (2008: A16,489 thousand) was incurred.
Net income for other liabilities consists of foreign currency exchange gains and losses. In financial year 2009, a
net gain of A2,038 thousand (2008: net loss A418 thousand) was incurred.
As a result of impairments of non-current securities there were no impairment losses in 2009 for financial
assets. The impairment loss for trade receivables amounted to A10,820 thousand (2008: A8,504 thousand) in 2009.
Credit risks
The Company’s exposure to credit risks mainly arises from its operating business. A credit risk is defined as an
unexpected loss of financial assets, e.g. if a customer is unable to meet its obligations within the appropriate period.
Throughout the operating businesses, receivables are locally monitored on an ongoing basis. Valuation allowances
are recorded to reflect credit risks.
The maximum exposure to credit risk is reflected by the carrying amounts of the financial assets reported in the
balance sheet. The Group counters the credit risk with its own credit management and with credit insurance. In 2009
approximately 61% (2008: 70%) of the trade receivables were covered by credit insurance.
(30) Derivative financial instruments
Derivative financial instruments are accounted for at fair value in compliance with IAS 39.
In operating its business the Group is exposed to interest and currency risks. Such risks are hedged using
derivative financial instruments.
The Group only uses standard instruments for which sufficient liquid markets exist. Derivative financial
instruments are entered into and managed in compliance with internal directives that govern the scope of action,
responsibilities and control systems. According to these directives, the use of derivative financial instruments is a
key task of the Corporate Finance department of Klöckner & Co SE, which manages and coordinates such use. The
transactions are concluded exclusively with counterparts with first-class credit ratings. Derivative financial
instruments cannot be used for speculative purposes, but exclusively for hedging risks associated with underlying
transactions.
IFRS 7 requires an entity to provide disclosure that enables users of financial statements to evaluate the nature
and the extent of risks arising from financial instruments. These risks encompass among others credit risk, market
risk and liquidity risk.
Information with regard to credit risk is provided in Note 29 Additional information for financial instruments.
Information on interest rate risk
The Group is exposed to interest rate changes due to the use of financial instruments. The hedging policy is
designed to cover interest rate changes of variable interest rate bearing financial liabilities. The Group is facing
interest rate exposure with regard to its central financing instruments in the euro zone as well to bilateral lines of
F-108

credit of its US and Swiss subsidiaries. The central finance department monitors and controls this exposure by using
derivative interest rate financial instruments.
Long-term financing needs in the euro zone are primarily refinanced by capital market instruments such as
convertible bonds with fixed coupons. Under the Group’s hedging policy variable interest bearing loans used for
long-term financing are synthetically converted to fixed rate using interest rate swaps. Due to their term and volume
these instruments qualify for cash flow hedge accounting.
Changes in interest levels will have an impact on the reserve for fair value adjustments of financial instruments
included in equity, and are therefore separately recognized in the sensitivity analysis.
Under consideration of the convertible bonds and the fixed rate bilateral credit arrangements as of December
31, 2009, approximately 63% of the financial indebtedness before transaction costs was of a fixed rate nature. If
hedging instruments are incorporated in the analysis, the amount of a fixed interest debt included in the financial
indebtedness before transaction costs amounts to approximately 98%.
Due to the measures implemented for liquidity protection a significant liquidity reserve was built up by shortterm
deposits at banks with first-class credit ratings. If interest rates increase the temporary liquidity reserves would
lead to improved interest income.
Under IFRS 7 interest rate risk and chances are assessed using sensitivity analyses in which the impact of
interest rate changes on interest income and expense and equity as of the end of the reporting period is assessed.
Interest rate risk is measured as cash flow risk.
The Group assesses equity and income statement effects under parallel shifting of the euro and US dollar yield
curves. The cash flow impact from the parallel shifting only refers to interest income and interest expense in the
following reporting period.
If US dollar/euro interest rate levels as of December 31, 2009 had been higher by 100 basis points the financial
result driven from financial liabilities and hedging instruments for the following year would have been impacted
negatively by A0.1 million. With a view to the liquidity reserve an investment period of one year would result in a
positive effect of A7.8 million.
At a US dollar/euro interest rate increase of 100 basis points the value of derivative financial instruments
designated as cash flow hedges would have been positively increased by A8.8 million, which would have been
reflected in equity in the reserve for fair value adjustments of financial instruments.
Information on foreign currency exchange risk
The Group is exposed to foreign currency exchange risk resulting from financing activity, Group internal
dividend payments and acquisitions of subsidiaries as well as from operating activity. The Group’s hedging policy is
focused on cash-flow-related exposures. Solely translation-related risks, which result from the conversion of assets
and liabilities, are not hedged.
The Group operates a central foreign currency exchange management. Foreign and domestic subsidiaries are
required to identify foreign currency exposure and to communicate the exposure to the central finance department,
or within certain thresholds, hedge the exposure with financial institutions. The hedging transactions cover the
exposure from actual and forecasted transactions.
As of the end of the reporting period no material foreign currency exchange risks from the operating business
or acquisitions were identified.
Financing activity foreign exchange risk is the risk that results from foreign currency loans of the holding
companies. As part of the central Group financing these loans denominated in Pounds Sterling and US dollars were
granted to subsidiaries and were fully hedged.
Due to the volume and long-term nature of a US dollar financing both the principal and the interest payments
were hedged using a cross currency swap, designated as cash flow hedge.
Loans granted in Pounds Sterling were hedged including interest payments via forward contracts and foreign
currency swaps.
The impact of changes of foreign currency rates on foreign exchange gains and losses as well as on the Group’s
equity as of the balance sheet date is monitored by a sensitivity analysis. The exposure is assessed as cash flow risk
for the following year.
F-109

The sensitivity analysis identifies compensating income effects of forward exchange contracts and swaps,
since their maturity is consistent to the maturity of the underlying transaction.
Cross currency swaps designated as cash flow hedge may result in changes in the reserves for fair values of
financial instruments included in equity. Increases or decreases in the US dollar to euro exchange rate would, if
assessed in isolation, lead to changes of such reserves. However, compensating changes in the value of the
underlying transaction would also be recorded in equity, because the underlying transaction is a net investment in a
foreign subsidiary.
Information on liquidity risk
The demand of liquidity is constantly monitored by the Corporate Finance department to ensure appropriate
levels of liquidity. During the financial market crisis the Group has implemented a set of measures to safeguard
liquidity which includes the restructuring of the syndicated loan and the European ABS program. The changes
encompassed new covenants which will prove more robust in economic downturns. By the rights issue and the
placement of a new convertible bond the Group further optimized its financing structure. In addition significant
liquidity reserves were established to ensure appropriate liquidity levels. Liquid funds are invested as short-term
deposits with the Group’s core banks. The solvency of these financial institutions is monitored on a regular basis.
Including the convertible bonds with nominal amounts of A423 million (2008: A325 million) and finance
leasing of approximately A9 million (2008: A11 million) the Group has lines of credit of approximately A1.7 billion
(2008: A1.8 billion), of which as of December 31, 2009, A677 million (2008: A862 million) or 41% (2008: 47%)
were used. This amount includes among bilateral credit facilities also the convertible bonds and drawings under the
syndicated loan, for which hedge-accounting is applied in accordance with IAS 39.
The following table illustrates the contractual undiscounted interest and principal payments of the nonderivative
and derivative financial instruments for the periods indicated.
December 31, 2009
Cash outflows
Less than
one year 1-5 years
More than
5 years Total
(E thousand)
Bonds ............................ Nominal values — 422,900 — 422,900
Interest 10,749 33,259 — 44,008
Total 10,749 456,159 — 466,908
Bank loans ........................ Nominal values 44,517 233,426 — 277,943
Interest 5,777 5,230 — 11,007
Total 50,294 238,656 — 288,950
ABS............................. Nominal values — 20,826 — 20,826
Interest 170 246 — 416
Total 170 21,072 — 21,242
Finance lease liabilities ............... Nominal values 2,191 6,176 386 8,753
Interest 205 288 4 497
Total 2,396 6,464 390 9,250
Total financial liabilities .............................
Cash outflows from derivative financial instruments designated
63,609 722,351 390 786,350
in interest hedging relationships ....................... 9,492 12,036 — 21,528
F-110

December 31, 2008
Cash outflows
Less than
one year 1-5 years
More than
5 years Total
Bonds ............................ Nominal values —
(E thousand)
325,000 — 325,000
Interest 4,875 14,625 — 19,500
Total 4,875 339,625 — 344,500
Bank loans ........................ Nominal values 42,985 319,737 — 362,722
Interest 10,929 19,171 — 30,100
Total 53,914 338,908 — 392,822
ABS............................. Nominal values — 212,372 — 212,372
Interest 8,222 9,520 — 17,742
Total 8,222 221,892 — 230,114
Finance lease liabilities ............... Nominal values 2,506 7,386 1,563 11,455
Interest 580 1,120 73 1,773
Total 3,086 8,506 1,636 13,228
Total financial liabilities .............................
Cash outflows from derivative financial instruments designated
70,097 908,931 1,636 980,664
in interest hedging relationships ....................... 6,713 10,084 — 17,583
Included are all financial instruments for which payments have already been fixed as of the end of the reporting
period; expected payments on future obligations not yet incurred have not been included. Variable interest payments
on financial instruments were determined on the interest rate fixed as of the end of the reporting period. For the use
of the revolving credit facility it was assumed that the level of drawings will be maintained until expiration of the
facility.
The nominal and fair values of the derivative financial instruments used to hedge interest and foreign exchange
exposures are as follows:
December 31, 2009 December 31, 2008
Not designated
in hedgeaccounting
Designated
in hedgeaccounting
(E million)
Not designated
in hedgeaccounting
Designated
in hedgeaccounting
Nominal values
Forward exchange transactions. ................. 64.1 — 280.6 —
Interest rate swaps. .......................... — 831.1 — 831.1
Other interest rate hedging instruments . . ......... 34.7 — 35.9 —
Cross-currency-swap ......................... — 223.7 — 223.7
Fair values
Forward exchange transactions. ................. (0.8) — 11.9 —
Interest rate swaps. .......................... — (17.9) — (12.9)
Other interest rate hedging instruments . . ......... (1.6) — (2.8) —
Cross-currency-swap ......................... — �6.9 — (31.8)
Hedging VOP .............................. (1.0) — (6.6) —
The nominal values correspond to the gross amounts of the currency and interest rate portfolio. 588,952 (2008:
837,000) options are used to hedge the exposure resulting from the Group’s virtual stock option programs. The fair
values of these instruments amount to A�1.0 million (2008: A�6.6 million).
The fair values of the derivative financial instruments are determined on the basis of banks’ quoted market
prices or on financial formulae based on models commonly used by banks. If fair values exist they correspond to the
amount third parties would pay for the rights or obligations arising from the financial instruments. The fair values
are the market values of the derivative financial instruments, irrespective of any offsetting changes in value in the
underlying transactions.
Forward exchange transactions with a nominal amount of A64.1 million (2008: A280.6 million) have a remaining
term of less than one year. To hedge its foreign currency exposure of long-term inter-group financing Klöckner & Co
Verwaltung GmbH entered into cross currency swaps maturing in May 2013 and December 2014, respectively. With
regard to the financing volume of USD 335 million the principal swap at the beginning and the end of the term as well
F-111

as semi-annual or quarterly interest payments the interest rate was fixed at the inception of the swap agreement. Due to
its duration and volume the cross currency swap qualifies as cash flow hedge under IAS 39.
The interest rate swaps designated in a hedging relationship relate to forward interest rate swaps and on an
interest rate swap on a volume of A223.7 million and a swap interest rate between 4.40% and 4.50%. The total term
of these transactions covers a period of up to seven years. The interest rate swaps are used to hedge existing and
future variable euro interest rate debt of the holding companies which relates to refinancing of non-current assets.
The other interest rate hedging instruments with a nominal amount of A34.7 million (2008: A35.9 million) refer
to a US dollar interest collar of Klöckner & Co Verwaltung GmbH with a floor of 3.75% and a cap of 5.80%. The US
dollar interest collar is used to hedge variable-interest-bearing US dollar loans of Namasco Corporation.
(31) Pending litigation, commitments and contingent liabilities
In addition to the KDI antitrust case (also see Note 35 Subsequent events) the Group is not subject to pending
litigation that may have a material effect on the Group’s net assets and results of operation. Despite the
comprehensive set of compliance measures, it can, however, not be ruled out that isolated violations may arise
or that there are yet undedected historic violations.
The liabilities on bills amount to A1 thousand (2008: A67 thousand). In addition the Group has issued
guarantees in connection with the disposal of subsidiaries. Such guarantees cover customary representations and
warranties as well as environmental and tax contingencies.
In the Klöckner & Co Group, there are other financial obligations arising in particular from agreements that
qualify as non-cancelable operating leases. Operating leases mainly relate to real estate, machinery, vehicles,
telephone systems and computer hardware. In some instances the leases include purchase options.
The future payments to be made under these leases are as follows:
December 31, 2009 December 31, 2008
(E thousand)
Due within one year ....................................... 49,575 45,199
Due between one and five years .............................. 106,013 104,609
Due after five years ........................................ 56,509 63,039
Future minimum lease payments (nominal amounts) ............. 212,097 212,847
There are also other financial obligations arising from the purchase obligation for investments, which
amounted to A4,495 thousand as of December 31, 2009 (2008: A2,098 thousand).
(32) Related party transactions
Within the framework of its ordinary business activities, the Klöckner & Co Group has business relationships
with numerous companies. These also include related parties that were accounted for at cost. Business relations
with these companies do not fundamentally differ from trade relationships with other companies. No material
transactions were conducted with any of these companies in the year under review.
The compensation model of the Management and Supervisory Board is presented in the compensation report,
which is included in the management report. The compensation of members of the Management Board of
Klöckner & Co SE for their activities in 2009 amounted to:
2009 2008
(E thousand)
Short-term benefits
— fixed components ....................................................... 1,412 1,487
— variable components ..................................................... 775 930
Share-based payment ...................................................... 1,366 2,072
The amount for share-based payments represents the fair value of the virtual stock options at the grant date.
During financial year 2009 payments for share-based compensation amounts to A920 thousand (2008: A2,773
thousand).
The additions to the statutory pension provisions for active members of the Management Board amounted to
A667 thousand (2008: A828 thousand). Pension provisions for a former Management Board member amount to
A1,440 thousand.
F-112

Business with members of the Management Board is restricted to their above function as members of the
Management Board.
Due to the resolution of the Annual General Meeting on June 7, 2006, individual disclosure of the Management
Board compensation is omitted.
In the 2009 financial year, remuneration paid to the Supervisory Board amounted to A339 thousand (2008:
A708 thousand).
A list of the members of the Management Board and the Supervisory Board is included on pages 12 and 13 of
this annual report.
Also a related party in accordance with IAS 24 is the pension fund of the Debrunner & Acifer group,
Switzerland. The pension fund leases premises to the Swiss subsidiaries. Rental expenses for such premises amount
to A1,021 thousand (2008: A903 thousand).
(33) Supplemental cash flow information
The consolidated statement of cash flows is presented in line with IAS 7 (Cash Flow Statement). The statement
of cash flows is of central importance in assessing the financial position of the Klöckner & Co Group.
The changes in the items of the statement of financial position that provide the basis for the statement of cash
flow cannot be directly reconciled to the statement of financial position due to the effects of currency translation and
changes in the scope of consolidation which are eliminated in compiling the statement of cash flows.
Cash flow from operating activities
Cash flow from operating activities amounted to A564.7 million in the financial year 2009 (2008: A186.9 million).
This reflects the robustness of the business model which — as discussed below —generates strong cash flows from
the release of working capital even in times of economic downturns.
Variance
2009/2008 2008/2007
Inventories ........................................................
(E thousand)
(431,161) 6,444
Trade receivables *) .................................................. (337,589) (143,449)
Trade payables ..................................................... (581) 223,699
Working capital. .................................................... �769,331 86,694
*) Including trade receivables sold under ABS programs.
Working capital declined net of foreign currency exchange effects, changes in scope of consolidation and
reclassification to assets held for sale by A�769.3 million to A636.8 million.
Cash flow from investing activities
Due to the reduced capital expenditure for property, plant and equipment and intangible assets of A25.0 million
and under consideration of proceeds from the sale of property, plant and equipment and non-current assets
(A13.9 million) and repayments of margin deposits for derivative financial instruments of A3.1 million net outflows
from investing activities amounted to A�8.0 million.
Cash flow from financing activities
Cash flow from financing activities are driven by proceeds from the capital market transactions in 2009 of
A288.8 million. Including net repayments of financial liabilities of A283.5 million and interest payments of
A28.2 million cash outflows for financing activities amount to A�23.8 million (2008: A�123.4 million).
The business activities of the Klöckner & Co Group continuously generate short-term cash and cash
equivalents. As a general rule they are used within one month to repay working capital credits.
Liquid funds
Liquid funds comprise cash and cash equivalents including short-term securities amounting to A826.5 million
as of December 31, 2009. Cash and cash equivalents include bank balances of A13,957 thousand (2008: A43,392
F-113

thousand) relating to the consolidated special purpose entities whose business is conducted exclusively for the
subsidiaries participating in the ABS program.
(34) Segment reporting
2009 2008 *)
2009 2008 2009 2008 2009 2008 2009 2008 *)
Europe North America Headquarters Consolidation Total
(E thousand)
External sales . ............... 3,186,155 5,373,659 674,338 1,375,936 18,977 44,623 (18,977) (44,623) 3,860,493 6,749,595
— of which with third parties . ..... 3,186,155 5,373,659 674,338 1,375,936 — — — — 3,860,493 6,749,595
— of which with other segments ....
Capital expenditure for intangible
assets, property, plant and
— — — — 18,977 44,623 (18,977) (44,623) — —
equipment . . ............... 23,124 55,449 626 3,566 897 1,969 — — 24,647 60,984
Segment result (EBITDA) . . . .....
Earnings before interest and taxes
56,593 376,936 (43,574) 148,624 (81,514) 75,076 — — (68,495) 600,636
(EBIT)...................
Amortization and depreciation of
intangible assets and property, plant
(6,041) 336,209 (68,541) 126,685 (103,551) 70,370 — — (178,133) 533,264
and equipment ..............
Impairment losses for intangible
assets and property, plant and
40,050 40,727 24,967 21,939 2,839 4,706 — — 67,856 67,372
equipment . . ............... 22,583 — — — 19,199 — — — 41,782 —
Other non-cash income and
expenses . . . ............... 146,946 (166,316) — — (66,818) 103,129 — — 80,128 (63,187)
December 31,
2009
Europe North America Headquarters Consolidation Total
December 31,
2008
December 31,
2009
December 31,
2008
December 31,
2009
December 31,
2008
December 31,
2009
December 31,
2008
December 31,
2009
December 31,
2008
Net working capital
(A thousand) . . . . .
Employees at year-
541,022 1,109,826 95,909 279,617 (134) 17,603 — — 636,797 1,407,046
end........... 7,708 8,696 1,216 1,409 108 177 — — 9,032 10,282
The earnings before interest and taxes (EBIT) can be reconciled to the consolidated net income before taxes as
follows:
2009 2008 *)
(E thousand)
Earnings before interest and taxes (EBIT) ................................... (178,133) 533,264
Financial result (Group) . ............................................... (61,699) (69,782)
Income before taxes (Group) ........................................... (239,832) 463,482
*) Comparative amounts for 2008 restated due to the initial application of IFRIC 14 (see Note 4).
Reporting of operating segments in accordance with IFRS 8 is based on the internal organization and reporting
structure. Klöckner & Co is organized by regions. The internal reporting compiles information at the level of the
reportable segments Europe and North America, which include all entities domiciled in those regions. Central
functions that are not assigned to a segment, as well as the consolidation effects are reported separately.
The segments use the same accounting policies described in Note 4 Significant accounting policies, except for
effects of intragroup transactions (e.g. profit distributions), which are eliminated within the individual segments.
The external sales comprise all sales generated with customers. Sales between segments are disclosed
separately to allow reconciliation to consolidated sales. Intersegment sales — exclusively deliveries from the
central purchasing entity Klöckner Global Sourcing GmbH, Duisburg — are invoiced at arms’ length exclusively.
EBITDA is defined as earnings before interest, taxes, depreciation and amortization and reversals of impairments of
intangible assets and property, plant and equipment.
Net working capital comprises inventories and trade receivables less trade liabilities.
As explained in Note 6 Specific items recognized in net income impairment of goodwill and property, plant and
equipment relates to CGU Spain and CGU United Kingdom. In the course of the initial consolidation of the
Klöckner & Co Group in 2005 the purchase price allocation, required by IFRS 3, was made centrally and attributed
to the segment Headquarters. Excess fair values for land and buildings were assigned to segment Headquarters due
F-114

to internal controlling purposes. As such the respective impairment losses on these fair values relating to the
Spanish property are inclued in the segment Headquarters.
Non-cash income and expenses mainly relate to the adjustments of the antitrust provision in France (Europe:
A145.8 million) and the corresponding claim against former shareholders (Headquarters, A—66.5 million). Further
details are provided in Note 6 Specific items recognized in net income.
Non-current assets by regions
Intangible assets, property, plant and equipment, investment property and non-current investments and
securities are broken out by regions as follows:
2009 2008
(E thousand)
Germany ............................................................ 52,610 54,766
Switzerland .......................................................... 150,111 154,811
United States. ........................................................ 200,290 231,757
France. ............................................................. 66,268 71,099
Spain .............................................................. 63,951 105,331
Other regions ........................................................ 101,957 113,140
Total .............................................................. 635,187 730,904
(35) Subsequent events
Reduction of antitrust fine KDI
On January 19, 2010 the French court of appeal (Cour d’Appel de Paris) reduced significantly the fine imposed
by the French antitrust authority on KDI S.A.S. in 2008 from A169.3 million to A23.5 million of which A17.5 million
had already been paid by the date of the issuance of these financial statements.
The reduction of the fine improves the 2009 group results of Klöckner & Co SE by a total of A79 million. The
limited effect is due to a compensation claim of Klöckner & Co totaling A70 million against the previous owners of
the Klöckner & Co Group resulting from the acquisition of the Group in 2005 which is now only used at lower level.
Acquisition of Bläsi
On January 22, 2010 Klöckner & Co acquired via its Swiss subsidiary Debrunner Koenig Holding AG the
distribution company Bläsi AG, located in Berne, Switzerland. With this acquisition the Swiss subsidiary now holds
a leading position in the greater Berne area for water supply and building technology products. Bläsi’s main
customers are linked to the construction segment. With its two sites in the greater Berne area Bläsi generated sales
of approximately A32 million in 2008.
(36) Fees and services of the auditor of the consolidated financial statements
The following fees were incurred for services performed by the auditor KPMG Hartkopf + Rentrop Treuhand
KG, Wirtschaftsprüfungsgesellschaft, Cologne and affiliated companies in the financial year:
2009 2008
(E thousand)
Audit of financial statements ................................................. 1,848 1,864
Other assurance or valuation services .......................................... 1,987 338
Tax advisory services ...................................................... 137 63
Other services. ........................................................... 197 516
4,169 2,781
The fees for auditing primarily include the audit of the consolidated IFRS financial statements and audits of the
stand-alone financial statements of the entities included in the consolidated financial statements. Other assurance
services include reviews of interim financial statements and fees (incl. insurance) for the rights issue.
The fees for tax advisory services relate to advice for individual matters and consulting on other national and
international tax issues.
F-115

The fees for other services relate mainly to project-related consulting services.
Other assurance fees incurred in connection with the rights issue and the issue of the convertible bond were
directly deducted from equity or to the extent attributable to the liability component of the convertible bond
deducted from the respective liability.
(37) Application of section 264 para. 3 HGB
In 2009 the following domestic subsidiaries made use in part of the exemption clause included in Section 264
para. 3 of the German Commercial Code (HGB):
Multi Metal Beteiligungs GmbH, Duisburg
Klöckner & Co International GmbH, Duisburg
Klöckner & Co Verwaltung GmbH, Duisburg
Kloeckner & Co USA Beteiligungs GmbH, Duisburg
Klöckner Stahl- und Metallhandel GmbH, Duisburg
Klöckner Global Sourcing GmbH, Duisburg
(38) Declaration of compliance with the German Corporate Governance Code in accordance with
section 161 german stock corporations act (AktG — Aktiengesetz)
On December 7, 2009 the Management Board and Supervisory Board issued the declaration of compliance in
accordance with Section 161 German Stock Corporations Act (AktG) and made it permanently available to the
shareholders on the Klöckner & Co Web site.
Duisburg, February 26, 2010
Klöckner & Co SE
The Management Board
Gisbert Rühl
Chairman of the Management Board
Ulrich Becker
Member of the Management Board
F-116

Annex to the notes to the financial statements and notes to the consolidated financial statements of
Klöckner & Co SE
Subsidiary listing according to Sections 285 No. 11/313 para. 2
German Commercial Code (HGB)
No. Entity
Interest
in percent
Held by
entity no.
Local
currency
Equity
in local
currency
Net income
in local
currency
Sales
in local
currency
1 Klöckner & Co Societas Europaea, Duisburg,
Germany
I. Consolidated affiliated companies
2 Multi Metal Beteiligungs GmbH, Duisburg,
Germany...................... 100.00 1 EUR 257,932,945.30 — 1)
—
3 Klöckner & Co International GmbH,
Duisburg, Germany .............. 100.00 2 EUR 357,899,443.92 — 1)
—
4 Klöckner & Co Verwaltung GmbH,
Duisburg, Germany . . . ......... 100.00 3 EUR 257,862,067.19 — 1)
—
5 Klöckner & Co Beteiligungs GmbH,
Duisburg, Germany . ......... 100.00 4 EUR 309,573,240.28 4,768,319.37 —
6 Klöckner Global Sourcing GmbH,
Duisburg, Germany . ......... 100.00 4 EUR 30,032.06 — 1)
22,555,128.59
7 Klöckner Stahl- und Metallhandel
GmbH, Duisburg, Germany . .... 100.00 4 EUR 81,934,377.62 — 1) 759,015,841.14
8 Dobbertin Drahthandel
GmbH, Hamburg,
Germany ............ 100.00 7 EUR 140,558.14 6,042.62 —
9 ASD metal services Ltd.,
Leeds, United Kingdom . . . 100.00 92 GBP 2.00 — —
10 Klöckner Stal i Metal Polska
Sp. z o.o., Poznań, Poland . . 99.99 7 PLN 7,825,061.66 (4,826,271.85) 60,976,261.61
0.01 8
11 Klöckner Romania S.R.L.,
Bucharest, Romania . .... 99.75 7 RON (254,620.75) (3,877,344.31) 8,834,584.68
0.25 8
12 Edelstahlservice Mágocs
Nemesacélfeldolgozó Kft,
Mágocs, Hungary . . . .... 100.00 7 HUF 59,635,676.00 8,182,954.00 216,345,200.00
13 Klöckner Stahlhandel CZ,
s.r.o., Prague, Czech
Republic ............. 100.00 7 CZK 26,528,138.00 (59,759,948.75) 207,372,210.48
14 Klöckner Metalsnab AD, Sofia,
Bulgaria . . .............. 99.77 4 BGN 12,470,737.70 (9,767,447.40) 38,804,181.00
15 Klöckner Participaciones SA,
Madrid, Spain . . . ......... 100.00 4 EUR 72,741.16 (2,389,521.86) —
16 Klöckner Stahl und Metall
Ges.m.b.H, Vienna, Austria .... 100.00 7 EUR 1,180,397.29 918,940.63 —
17 Klöckner & Co Financial Services S.A.,
Luxembourg . ................... 100.00 1 EUR 54,705.00 23,705.00 —
18 Klöckner S.à r.l., Luxembourg . .... 100.00 3 EUR 12,500.00 — —
19 Klöckner Investment SCA,
Luxembourg . .............. 96.77 3 EUR (585,624.49) 1,021,176.28 —
3.23 18
20 Klöckner Finance S.à r.l.,
Luxembourg . .............. 100.00 19 EUR (15,405.24) (45,946.48) —
21 Klöckner & Co Financial Services
B.V., Rotterdam, The Netherlands . . 100.00 22 EUR 19,252,052.39 160,143.14 —
22 Klöckner Netherlands Holding
B.V., Barendrecht, The
Netherlands .............. 100.00 4 EUR 110,824,549.75 15,443,462.46 —
23 Buysmetal N.V., Harelbeke,
Belgium .............. 99.99 72 EUR 15,511,958.52 440,835.89 37,529,997.86
0.01 76
24 Metall- und Service-Center
Ges.m.b.H. Nfg. KG,
Vienna, Austria ........ 51.00 16 EUR 7,737,170.56 2,844,418.19 50,137,369.75
1) Profit and loss transfer agreement.
F-117

No. Entity
Interest
in percent
Held by
entity no.
Local
currency
Equity
in local
currency
Net income
in local
currency
Sales
in local
currency
25 Klöckner UK Holdings Ltd.
i. L., Leeds, United
Kingdom . . ......... 100.00 28 GBP — — —
26 Klöckner Namasco
Holding Corporation,
Wilmington, Delaware,
USA............ 100.00 35 USD 406,001,756.51 (24,411,258.79) —
27 Klöckner Metal Services
Ltd., Leeds, United
Kingdom ......... 100.00 28 GBP 9,553,699.00 968,684.00 48,906,874.00
28 Klöckner UK France
Holding Ltd., Leeds,
United Kingdom .... 100.00 4 GBP 33,300,232.00 (1,927,796.00) —
29 Namasco Corporation,
Wilmington, Delaware,
USA ............... 100.00 26 USD 394,881,566.16 (5,739,323.62) 444,171,521.56
30 Namasco Holding Corporation,
Wilmington, Delaware, USA . . . 100.00 29 USD 109,064,481.43 — —
31 Namasco Metals L.P., Dallas,
Texas, USA .............. 99.00 30 USD 110,166,324.68 (661,546.15) 130,008,447.60
1.00 29
32 Primary Steel LLC, Middletown,
Connecticut, USA . . ......... 100.00 29 USD 222,509,241.20 (18,005,434.32) 286,563,716.32
33 Kloeckner Burlington Limited,
Burlington, Ontario, Canada . .... 100.00 22 CAD (5,349,126.47) (1,257,456.59) —
34 Kloeckner Alberta Limited,
Calgary, Alberta, Canada . .... 100.00 22 CAD (1,001,473.97) (502,610.37) —
35 Klöckner USA Holding Inc.,
Wilmington, Delaware, USA . . . 100.00 4 USD 112,248,972.93 (52,156,377.22) —
36 Kloeckner & Co USA
Beteiligungs GmbH,
Duisburg, Germany . . . .... 100.00 4 EUR 160,025,000.00 — 1)
—
37 Temtco Steel, LLC, Wilmington,
Delaware, USA . ......... 100.00 35 USD 188,828,720.37 (12,636,598.00) 153,495,226.12
38 Debrunner Koenig Holding AG,
St. Gallen, Switzerland . .... 100.00 4 CHF 163,700,705.54 49,264,623.04 —
39 Debrunner Acifer AG, St.
Gallen, Switzerland . . . .... 100.00 38 CHF 118,472,700.55 30,506,819.54 613,105,725.45
40 Molok (Valais) SA, Siders,
Switzerland . . . ......... 100.00 47 CHF 378,323.46 3,369.90 —
41 Debrunner Acifer SA Romandie,
Crissier, Switzerland . . .... 100.00 38 CHF 20,926,842.21 4,446,218.29 165,726,868.75
42 Debrunner Acifer SA
Giubiasco, Giubiasco,
Switzerland . . ......... 100.00 38 CHF 7,428,666.73 2,007,601.57 39,323,634.13
43 Metall Service Menziken AG,
Menziken, Switzerland . . . 100.00 38 CHF 10,328,620.59 1,054,215.97 77,511,647.90
44 Klöckner Stahl AG, St. Gallen,
Switzerland .............. 100.00 38 CHF 107,839.46 (321.73) —
45 Koenig Feinstahl AG, Dietikon,
Switzerland. . .............. 100.00 38 CHF 32,877,383.53 12,408,554.61 75,608,859.86
46 Debrunner Koenig Management AG,
St. Gallen, Switzerland ........ 100.00 38 CHF 2,968,549.99 90,773.41 —
47 Debrunner Acifer AG Wallis, Visp,
Switzerland .............. 100.00 38 CHF 10,807,947.28 3,052,366.71 50,385,674.66
48 Davum Construction S.A., Crissier,
Switzerland. . .............. 100.00 38 CHF 4,769,690.33 648,800.25 —
49 ODS B.V., Rotterdam, The
Netherlands .............. 100.00 22 EUR 34,784,341.66 (9,230,153.73) 221,482,697.26
50 O-D-S Transport B.V.,
Barendrecht, The Netherlands . . 100.00 49 EUR 18,000.00 — —
1) Profit and loss transfer agreement.
F-118

No. Entity
Interest
in percent
Held by
entity no.
Local
currency
Equity
in local
currency
Net income
in local
currency
Sales
in local
currency
51 ODS do Brasil Sistemas de
Medicao LTDA, Campinas
São Paulo, Brazil ......... 80.00 49 BRL 2,976,789.71 2,165,499.44 21,790,939.71
52 O-D-S N.V., Antwerp, Belgium . . 100.00 49 EUR 1,818,545.87 474,600.47 4,851,304.15
53 ODS Metals N.V., Antwerp,
Belgium .............. 99.50 49 EUR 877,204.89 (113,409.22) 4,114,180.53
0.50 22
54 Teuling Staal B.V., Barendrecht,
The Netherlands ......... 100.00 49 EUR 5,362,717.00 41,465.00 4,900,275.00
55 Richardsons Westgarth Ltd., Leeds,
United Kingdom . . . ......... 100.00 28 GBP 17,379,253.00 — —
56 Armstrong Plate Ltd., Leeds,
United Kingdom . . ......... 100.00 55 GBP (584,019.00) — —
57 Gardiner, Barugh & Jones Ltd.,
Leeds, United Kingdom .... 100.00 55 GBP 1,561,971.00 — —
58 Grange Steels Ltd., Leeds,
United Kingdom ......... 100.00 55 GBP 558,489.00 — —
59 Hilton Steels Ltd., Leeds,
United Kingdom ......... 100.00 55 GBP (83,890.00) — —
60 Humber Steel Stockholders Ltd.,
Leeds, United Kingdom .... 100.00 55 GBP 2,371,118.00 — —
61 RW Project Metals Ltd., Leeds,
United Kingdom ......... 100.00 55 GBP 46,299.00 — —
62 Organically Coated Steels Ltd.,
Leeds, United Kingdom .... 100.00 55 GBP 2,803,828.00 — —
63 Parkin Steel Stockholders Ltd.,
Leeds, United Kingdom .... 100.00 55 GBP 343,591.00 — —
64 Peterborough Steels Ltd., Leeds,
United Kingdom ......... 100.00 55 GBP (370,622.00) — —
65 RW Doncaster Ltd., Leeds,
United Kingdom ......... 100.00 55 GBP (319,199.00) — —
66 John O. Holt & Sons Ltd.,
Leeds, United Kingdom .... 100.00 55 GBP 249,843.00 — —
67 Armstrong Steel Ltd., Leeds, United
Kingdom . . . .............. 100.00 66 GBP 14,983,299.00 (4,100,838.00) 63,055,646.00
68 Berry Hill Group Ltd., Leeds,
United Kingdom . . ......... 100.00 55 GBP 1,872,067.00 — —
69 James & Tatton Ltd., Leeds,
United Kingdom . . ......... 100.00 68 GBP 2,096,520.00 — —
70 Westgarth Aberdeen Ltd.,
Bathgate, United Kingdom .... 100.00 55 GBP (116,022.00) — —
71 JRS Steel Stockholders Ltd.,
Leeds, United Kingdom . . .... 100.00 55 GBP (762,236.00) — —
72 Klöckner Distribution
Industrielle S.A.,
Aubervilliers, France . . .... 96.77 4 EUR 173,088,309.54 120,786,469.00 —
73 KDI Export S.A.S., Cergy-
Pontoise, France . . ......... 100.00 76 EUR 1,150,206.00 384,519.00 42,655,338.00
74 Reynolds European S.A.S., Rueil
Malmaison, France ......... 100.00 72 EUR 13,887,401.00 1,096,950.00 67,484,580.00
75 Adrien Targe S.A.S., La Grand
Croix, France .............. 100.00 76 EUR 7,889,957.00 (2,456,725.00) 42,027,520.00
76 KDI S.A.S, Aubervilliers, France . . . 100.00 72 EUR (35,117,091.00) (41,144,414.00) 662,703,474.00
77 KDI Immobilier S.A.S.,
Aubervilliers, France ........ 100.00 76 EUR 74,003,317.00 8,499,109.00 13,639,239.00
78 Prafer SNC, Woippy, France . . . 100.00 76 EUR 3,365,565.00 1,391,327.00 12,489,439.00
79 KDI Davum S.A.S., Le Port, La
Réunion, France . . ......... 100.00 76 EUR 3,976,545.00 122,215.00 19,921,642.00
80 KDI Authentic S.A.S.,
Aubervilliers, France ........ 100.00 76 EUR 8,613,125.00 17,392.00 132,644.00
81 Comercial de Laminados S.A.,
Barcelona, Spain. . ......... 100.00 15 EUR 47,142,813.98 (3,571,517.58) 79,573,503.00
82 Klöckner Aluminio Ibérica S.A.,
Madrid, Spain . . . ......... 100.00 81 EUR (2,306,375.52) (3,366,595.98) 35,009,785.00
F-119

No. Entity
Interest
in percent
Held by
entity no.
Local
currency
Equity
in local
currency
Net income
in local
currency
Sales
in local
currency
83 Hierros del Turia S.A., Valencia,
Spain . . .............. 80.00 81 EUR 16,818,055.14 (1,998,328.81) 33,707,753.00
84 Materiales Siderúrgicos S.A.,
Madrid, Spain . . ......... 100.00 81 EUR 6,293,078.51 (1,019,021.80) 18,901,774.00
85 Suministros Loinaz S.A.,
Guipuzcoa, Spain . .... 100.00 81 EUR 6,324,553.73 (1,316,169.96) 20,504,315.00
86 Hierros Guadalquivir S.A.,
Seville, Spain . . ......... 100.00 81 EUR 16,378,003.03 (2,309,701.30) 33,106,902.00
87 Hierros del Ebro S.A., Zaragoza,
Spain . . .............. 100.00 81 EUR 11,217,384.03 (1,180,984.18) 25,787,837.00
88 Perfiles Aragón S.A., Zaragoza,
Spain . . .............. 100.00 81 EUR 8,825,404.18 (2,227,323.60) 27,640,828.00
89 Hierros del Cantábrico S.A.,
Asturias, Spain . ......... 100.00 81 EUR 5,743,057.08 (5,727,694.97) 38,738,441.00
90 Cortichapa S.A., Valencia, Spain. . 85.00 81 EUR 8,393,206.45 (1,105,747.59) 34,777,061.00
91 Aesga Aceros Especiales
S.A., Madrid, Spain .... 100.00 81 EUR 400,362.10 (2,459,134.00) 8,848,468.00
92 ASD Limited, Leeds, United
Kingdom .............. 100.00 28 GBP 27,706,487.00 (17,935,521.00) 196,807,766.00
93 ASD Westok Limited, Leeds,
United Kingdom ......... 100.00 28 GBP 9,220,694.00 2,168,831.00 11,324,156.00
94 ASD Interpipe Ltd., Leeds,
United Kingdom ......... 100.00 28 GBP 1,135,591.00 (314,194.00) 12,599,134.00
95 ASD Multitubes Ltd., Leeds,
United Kingdom ......... 100.00 28 GBP (551,219.00) (479,680.00) 3,736,727.00
96 NC Receivables Corporation,
Wilmington, Delaware,
USA................. 100.00 31 USD 2,300,398.04 5,045.30 —
97 Comercial de Laminados Cobros
S.L., Madrid, Spain . . . .... 100.00 81 EUR 3,006.00 — —
98 Hierros Cantabrico Cobros S.L.,
Madrid, Spain . . ......... 100.00 81 EUR 3,006.00 — —
99 Hierros Ebro Cobros S.L., Madrid,
Spain .................. 100.00 81 EUR 3,006.00 — —
100 Hierros Guadalquivir Cobros S.L.,
Madrid, Spain . . . ......... 100.00 81 EUR 3,006.00 — —
101 Hierros Turia Cobros S.L., Madrid,
Spain . . ................... 100.00 81 EUR 3,006.00 — —
102 Klöckner Aluminio Ibérica Cobros S.L.,
Madrid, Spain. . .............. 100.00 81 EUR 3,006.00 — —
103 Materiales Siderúrgicos Cobros S.L.,
Madrid, Spain .............. 100.00 81 EUR 3,006.00 — —
104 Perfiles Aragón Cobros S.L.,
Madrid, Spain . . . ......... 100.00 81 EUR 3,006.00 — —
105 Suministros Loinaz Cobros S.L.,
Madrid, Spain . . ......... 100.00 81 EUR 3,006.00 — —
II. Non-consolidated affiliated companies
106 Sammi Klöckner International GmbH,
Duisburg, Germany .................. 100.00 5 EUR (14,069,250.67) (10,496.26) —
107 KDI Courtages SARL, Paris, France . . . ....
108 Richardson Westgarth Employees Trustees
100.00 72 EUR 15,505.00 (10,244.00) —
Ltd., Leeds, United Kingdom . . . .........
109 Klöckner Steel Company Ltd., Leeds, United
100.00 55 GBP 1.00 — —
Kingdom . ........................ 80.00 5 GBP 61,266.00 — 2)
—
110 UAB Klöckner Baltija, Klaipeda, Lithuania . . . 100.00 4 LTL 154,775.00 37,617.00 2)
III. Associates
111 Debrunner Koenig Informatik AG, Dietikon,
—
Switzerland. ....................... 50.00 38 CHF 268,346.12 95,975.90 2,201,167.05
112 Birs-Stahl AG, Birsfelden, Switzerland . . .... 50.00 39 CHF 650,277.97 38,741.34 2)
1,801,553.35
IV. Participations over 20%
113 GIE Mer, La Réunion, France. . . ......... 20.00 79 EUR 11,037.00 3,037.00 2)
15,000.00
2) Financial statement as of December 31, 2008.
F-120

Annex to the notes to the financial statements and notes the consolidated financial statements of
Klöckner & Co SE
Information pursuant to Section 160 para. 1
No. 8 German Stock Corporations Act (AktG)
Notifying institutions Domicile
Voting
interest in
percent
Date on which
threshold was met
Increase over threshold
SIA Funds AG ................... Ziegelbrücke, Switzerland 3,002 April 16, 2009
FIL Limited ..................... Hamilton, Bermuda 3.08 June 22, 2009
FIL Investment Management Limited . . Hildenborough, United Kingdom 3.08 June 22, 2009
FIL Investments International ........ Hildenborough, United Kingdom 3.06 June 22, 2009
Barclays Global Investors N.A. ...... SanFrancisco, USA 3.01 August 21, 2009
JPMorgan Chase & Co ............. NewYork, USA 6.02 September 18, 2009
JPMorgan Chase Bank N.A. ........ Columbus, USA 6.02 September 18, 2009
JPMorgan International Inc. ......... NewYork, USA 6.02 September 18, 2009
Bank One International Holdings
Corporation ................... Chicago, USA 6.02 September 18, 2009
JPMorgan International Finance
Limited ...................... Newark, USA 6.02 September 18, 2009
JPMorgan Capital Holdings Limited . . . London, United Kindom 6.02 September 18, 2009
JPMorgan Chase (UK) Holdings
Limited ...................... London, United Kindom 6.02 September 18, 2009
JPMorgan Chase International Holdings
Limited ...................... London, United Kindom 6.02 September 18, 2009
JPMorgan Securities Ltd. ........... London, United Kindom 6.02 September 18, 2009
The Royal Bank of Scotland Group
plc.......................... Edinburgh, United Kingdom 6.87 September 18, 2009
RFS Holdings B.V. ............... Amsterdam, The Netherlands 6.87 September 18, 2009
ABN AMRO Holding N.V. ......... Amsterdam, The Netherlands 6.87 September 18, 2009
ABN AMRO Bank N.V. ........... Amsterdam, The Netherlands 6.87 September 18, 2009
Deutsche Bank Aktiengesellschaft. .... Frankfurt, Germany 6.02 September 18, 2009
Commerzbank Aktiengesellschaft ..... Frankfurt, Germany 6.09 September 18, 2009
Barclays Plc. .................... London, United Kindom 6.63 September 18, 2009
BlackRock Institutional Trust Company,
N.A. ........................ NewYork, USA 3.20 December 1, 2009 *)
BlackRock Delaware Holdings, Inc. . . . New York, USA 3.20 December 1, 2009
BlackRock Holdco 6 LLC .......... NewYork, USA 3.20 December 1, 2009
BlackRock Holdco 4 LLC .......... NewYork, USA 3.20 December 1, 2009
BlackRock Financial Management,
Inc. ......................... NewYork, USA 5.61 December 1, 2009
BlackRock Holdco 2 LLC .......... NewYork, USA 5.61 December 1, 2009
BlackRock, Inc. ................. NewYork, USA 5.61 December 1, 2009
Decrease below threshold
Alken Fund SICAV ............... Luxembourg 2.97 February 3, 2009
Virmont S.à r.l. .................. Luxembourg 2.97 February 3, 2009
FIL Limited ..................... Hamilton, Bermuda 2.89 March 19, 2009
FIL Investment Management Limited . . Hildenborough, United Kingdom 2.89 March 19, 2009
FIL Investments International ........ Hildenborough, United Kingdom 2.89 March 19, 2009
SIA Funds AG ................... Ziegelbrücke, Switzerland 1.16 May 15, 2009
JPMorgan Chase & Co ............. NewYork, USA 0.09 September 22, 2009
JPMorgan Chase Bank N.A. ........ Columbus, USA 0.09 September 22, 2009
F-121

Notifying institutions Domicile
Voting
interest in
percent
Date on which
threshold was met
JPMorgan International Inc. ......... NewYork, USA 0.09 September 22, 2009
Bank One International Holdings
Corporation ................... Chicago, USA 0.09 September 22, 2009
JPMorgan International Finance
Limited ...................... Newark, USA 0.09 September 22, 2009
JPMorgan Capital Holdings Limited . . . London, United Kindom 0.09 September 22, 2009
JPMorgan Chase (UK) Holdings
Limited ...................... London, United Kindom 0.09 September 22, 2009
JPMorgan Chase International Holdings
Limited ...................... London, United Kindom 0.09 September 22, 2009
JPMorgan Securities Ltd. ........... London, United Kindom 0.09 September 22, 2009
The Royal Bank of Scotland Group
plc.......................... Edinburgh, United Kingdom 0.35 September 22, 2009
RFS Holdings B.V. ............... Amsterdam, The Netherlands 0.35 September 22, 2009
ABN AMRO Holding N.V. ......... Amsterdam, The Netherlands 0.35 September 22, 2009
ABN AMRO Bank N.V. ........... Amsterdam, The Netherlands 0.35 September 22, 2009
Commerzbank Aktiengesellschaft ..... Frankfurt, Germany 0.24 September 22, 2009
Deutsche Bank Aktiengesellschaft. .... Frankfurt, Germany 0.05 September 23, 2009
FIL Investments International ........ Hildenborough, United Kingdom 2.99 September 23, 2009
FIL Limited ..................... Hamilton, Bermuda 2.97 September 25, 2009
FIL Investment Management Limited . . Hildenborough, United Kingdom 2.97 September 25, 2009
*) Information subsequently withdrawn
F-122

The following auditor’s report, prepared in accordance with § 322 HGB (“Handelgesetzbuch”: “German
Commercial Code”), refers to the complete consolidated financial statements, comprising the statement of income,
the statement of comprehensive income, the statement of financial position, the statement of cash flows, the
summary of changes in equity and the notes to the financial statements, together with the group management report
which is combined with the management report of Klöckner & Co SE for the business year from January 1, 2009 to
December 31, 2009. The combined group management report is not included in this prospectus.
AUDITOR’S REPORT
We have audited the consolidated financial statements prepared by Klöckner & Co SE, Duisburg, comprising
statement of income, statement of comprehensive income, statement of financial position, statement of cash flows,
summary of changes in equity and notes to the financial statements, together with the management report for the
company and the Group for the business year from January 1, 2009 to December 31, 2009. The preparation of the
consolidated financial statements, the management report of the company and the Group in accordance with IFRSs
as adopted by the EU, and the additional requirements of German commercial law pursuant to Section 315a
paragraph 1 HGB (Handelsgesetzbuch “German Commercial Code”) are the responsibility of the parent company’s
management. Our responsibility is to express an opinion on the consolidated financial statements, on the
management report of the company and on the Group based on our audit.
We conducted our audit of the consolidated financial statements in accordance with Section 317 HGB and
German generally accepted standards for the audit of financial statements promulgated by the Institut der
Wirtschaftsprüfer (IDW) as well as supplementary consideration of International Standards on Auditing (ISA).
Those standards require that we plan and perform the audit such that misstatements materially affecting the
presentation of the net assets, financial position and results of operations in the consolidated financial statements in
accordance with the applicable financial reporting framework and in the group management report are detected with
reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group
and expectations as to possible misstatements are taken into account in the determination of audit procedures. The
effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the
consolidated financial statements and the group management report are examined primarily on a test basis within
the framework of the audit. The audit includes assessing the annual financial statements of those entities included in
consolidation, the determination of entities to be included in consolidation, the accounting and consolidation
principles used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements and the management report of the Group. We believe that our audit provides a
reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs, as
adopted by the EU, the additional requirements of German commercial law pursuant to Section 315a para. 1 HGB
and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance
with these requirements. The Group management report is consistent with the consolidated financial statements and
as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risks of future
development.
Cologne, February 26, 2010
KPMG Hartkopf + Rentrop Treuhand KG
Wirtschaftsprüfungsgesellschaft
Philippi
Wirtschaftsprüfer
F-123
Michels-Scholz
Wirtschaftsprüfer

AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
KLÖCKNER & CO SE AS OF AND FOR THE FINANCIAL YEAR
ENDED DECEMBER 31, 2008 (IFRS)
F-124

Consolidated statement of income for the 12-month period ending December 31, 2008
Notes
Jan. 1 –
December 31, 2008
Jan. 1 –
December 31, 2007
Sales ............................................ (7)
(E thousand)
6,749,595 6,274,143
Other operating income. .............................. (8) 371,182 96,689
Change in inventory ................................. 10,832 4,434
Own work capitalized ................................ 73 40
Cost of materials ................................... (9) (5,394,417) (5,057,937)
Personnel expenses ..................................
Depreciation, amortization & impairments
(10) (546,272) (509,160)
thereof impairment losses: 0 (2007: –287) ............... (67,372) (63,858)
Other operating expenses ............................. (11) (590,612) (439,029)
Operating result ................................... 533,009 305,322
Income from investments ............................. 0 1,484
Finance income .................................... 6,981 4,998
Finance expenses ................................... (76,763) (102,169)
Financial result .................................... (12) (69,782) (97,171)
Income before taxes ................................ 463,227 209,635
Income taxes ...................................... (13) (79,254) (53,579)
Net income ....................................... 383,973 156,056
thereof attributable to
— shareholders of Klöckner & Co SE .................. 398,134 133,385
— minority interests ............................... (14,161) 22,671
Earnings per share ................................. (14)
— basic ........................................ 8.56 2.87
— diluted. ...................................... 8.11 2.87
F-125

Consolidated balance sheet as of December 31, 2008
Notes
December 31, December 31,
2008
2007
(E thousand)
Assets
Non-current assets
Intangible assets ........................................... (15a) 235,931 197,581
Property, plant and equipment. ................................ (15b) 479,421 482,138
Investment property ........................................ (15c) 13,188 0
Financial assets ........................................... 2,364 2,661
Other assets .............................................. (18) 25,545 19,736
Deferred tax assets ......................................... (13) 46,491 33,336
Non-current assets ........................................
Current assets
802,940 735,452
Inventories ............................................... (16) 1,000,612 955,644
Trade receivables .......................................... (17) 798,618 929,964
Current income tax receivable. ................................ (13) 29,388 6,572
Other assets .............................................. (18) 141,845 86,367
Liquid funds ............................................. (19) 296,636 153,558
thereof cash and cash equivalents ............................ 293,531 153,558
thereof restricted cash. .................................... 3,105 0
Assets held for sale ........................................ (20) 4,942 98,596
Total current assets ....................................... 2,272,041 2,230,701
Total assets ..............................................
Equity and liabilities
Equity
3,074,981 2,966,153
Subscribed capital ......................................... 116,250 116,250
Capital reserves ........................................... 260,496 260,496
Retained earnings .......................................... 702,034 412,227
Accumulated other comprehensive income ....................... (16,368) (28,332)
Equity attributable to shareholders of Klöckner & Co SE ......... 1,062,412 760,641
Minority interests .......................................... 11,998 84,283
Total equity .............................................
Liabilities
Non-current liabilities
(21) 1,074,410 844,924
Provisions for pensions and similar obligations .................... (23) 180,095 188,457
Other provisions. .......................................... (24) 36,924 59,151
Income tax liabilities ....................................... (13) 50 92
Financial liabilities ......................................... (25) 813,000 813,076
Other liabilities ........................................... (27) 59,634 8,962
Deferred tax liabilities ...................................... (13) 85,028 82,364
Total non-current liabilities .................................
Current liabilities
1,174,731 1,152,102
Other provisions. .......................................... (24) 284,766 144,355
Income tax liabilities ....................................... (13) 19,139 18,223
Financial liabilities ......................................... (25) 48,112 72,644
Trade payables ............................................ (26) 392,183 609,863
Other liabilities ........................................... (27) 81,640 91,748
Liabilities associated with assets held for sale ..................... (20) 0 32,294
Total current liabilities ..................................... 825,840 969,127
Total liabilities ........................................... 2,000,571 2,121,229
Total equity and liabilities .................................. 3,074,981 2,966,153
F-126

Consolidated statement of cash flows for the period from January 1 to December 31, 2008
2008 2007
(E thousand)
Income before taxes ................................................. 463,227 209,635
Financial result ..................................................... 69,782 97,172
Depreciation and amortization .......................................... 67,372 63,873
Other non-cash expenses and income ..................................... 63,187 (3,375)
Gain on disposal of subsidiaries and other non-current assets ................... (277,414) (39,549)
Operating cash flow. ................................................ 386,154 327,756
Changes in provisions ................................................
Changes in other assets and liabilities
(722) (46,469)
Inventories. ...................................................... (6,444) (70,783)
Trade receivables .................................................. 143,449 29,176
Other assets ...................................................... (43,071) (17,930)
Trade payables. ................................................... (223,699) (63,584)
Other liabilities ................................................... 24,681 (545)
Income taxes paid ................................................... (93,464) (49,117)
Cash flow from operating activities ..................................... 186,884 108,504
Proceeds from the sale of non-current assets and assets held for sale .............. 11,565 38,314
Proceeds from the disposal of consolidated subsidiaries ....................... 376,101 0
Payments for intangible assets, property, plant and equipment ................... (48,111) (60,697)
Acquisition of subsidiaries ............................................. (264,360) (355,833)
Margin deposits for derivative transactions . ................................ (3,105) 0
Cash flow from investing activities ..................................... 72,090 (378,216)
Equity component of convertible bond ....................................
Dividends paid to
0 62,098
— Shareholders of Klöckner & Co SE . . ................................ (37,200) (37,200)
— Minority interests ............................................... (2,478) (9,579)
Borrowings ........................................................ 425,187 1,270,021
Repayment of financial liabilities ........................................ (471,186) (912,862)
Interest paid ....................................................... (45,398) (81,943)
Interest received .................................................... 7,636 4,312
Cash flow from financing activities ..................................... (123,439) 294,847
Changes in cash and cash equivalents ................................... 135,535 25,135
Effect of foreign exchange rates on cash and cash equivalents ................... 4,438 (1,733)
Cash and cash equivalents at the beginning of the period ...................... 153,558 130,156
Cash and cash equivalents at the end of the period ........................ 293,531 153,558
F-127

Subscribed
capital
Klöckner
&CoSE
Summary of changes in equity
Capital
reserves
Klöckner
&CoSE
Retained
earnings
Accumulated other
comprehensive income
Currency
translation
adjustment
Fair value
adjustments
of financial
instruments
(E thousand)
Equity
attributable
to shareholders
of Klöckner
&CoSE
Minority
interests Total
Balance as of January 1, 2007 .....
Income/expenses directly recognized
in equity ..................
116,250 197,699 381,915 (9,204) 686,660 112,789 799,449
Foreign currency translation . . . . . . (18,645) (18,645) (1,873) (20,518)
Gain-/loss from cash flow hedges . . (858) (858) (858)
Related income tax . . . ........ 112 263 375 375
Net income .................. 133,385 133,385 22,671 156,056
Comprehensive income. ......... 114,257
Acquisition of minority interests . . . .
Equity component of convertible
(66,493) (66,493) (39,725) (106,218)
bond . . . .................. 62,797 (490) 62,307 62,307
Dividends . .................. (37,200) (37,200) (9,579) (46,779)
Other changes . . . ............. 1,110 1,110 1,110
Balance as of December 31, 2007 ... 116,250 260,496 412,227 (27,737) (595) 760,641 84,283 844,924
Balance as of January 1, 2008 ..... 116,250 260,496 412,227 (27,737) (595) 760,641 84,283 844,924
Income/expenses directly recognized
in equity ..................
Foreign currency translation . . . . . . 46,568 46,568 46,568
Gain-/Loss from cash flow hedges. . (43,807) (43,807) (43,807)
Related income tax . . . ........
Reclassification to profit and loss due
(5,336) 13,449 8,113 8,113
to sale of foreign subsidiaries . . . . . 1,090 1,090 1,090
Net income .................. 398,134 398,134 (14,161) 383,973
Comprehensive income. ......... 410,098
Acquisition of minority interests . . . . (71,127) (71,127) (55,646) (126,773)
Dividends . .................. (37,200) (37,200) (2,478) (39,678)
Balance as of December 31, 2008 ... 116,250 260,496 702,034 14,585 (30,953) 1,062,412 11,998 1,074,410
F-128

Notes to the consolidated financial statements of Klöckner & Co SE, Duisburg, as of December 31, 2008
(1) Company information
Klöckner & Co SE (“Klöckner & Co” or “the Company”) originated from Klöckner & Co AG by legal
transformation on August 8, 2008. As this change was made prior to the compilation of these financial statements
the Company is referred to as such in this document. Klöckner & Co SE is entered in the commercial register of the
Duisburg Local Court under HRB 20486, and is a listed corporation domiciled in Duisburg, Am Silberpalais 1. The
consolidated financial statements of Klöckner & Co SE and its subsidiaries (“Klöckner & Co Group” or “Group”)
were authorized for issuance to the Supervisory Board by way of resolution of the Management Board on March 3,
2009. The Supervisory Board’s responsibility is to audit such financial statements and to issue a statement as to
whether it will approve the consolidated financial statements.
The Klöckner & Co Group is the largest mill-independent multi metal distributor in Europe and North
America. Alongside trading of steel, aluminum and various industrial products, it also provides a range of
associated services.
The shares of Klöckner & Co SE were listed in the MDAX» on January 29, 2007.
(2) Accounting policies
The consolidated financial statements as of December 31, 2008 were prepared in accordance with International
Financial Reporting Standards (“IFRS”), as adopted by the EU, and the additional requirements of the
German Commercial Code (“HGB”) pursuant to section 315a (1) HGB. All binding IFRS and the associated
interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) as of December 31,
2008 were applied.
The financial statements of the companies included in the consolidated financial statements, all of which have
been prepared as of December 31, 2008, are based on uniform accounting policies.
The consolidated financial statements are prepared in euros. Unless otherwise indicated, all amounts are stated
in thousands of euros (A thousand). Deviations from the unrounded amounts may arise.
With the exception of certain financial instruments that are accounted for at fair value, the consolidated
financial statements have been prepared on the historical cost basis.
(3) Scope and principles of consolidation
The consolidated financial statements incorporate the financial statements of Klöckner & Co SE and the
companies controlled by Klöckner & Co SE (“subsidiaries”). Control is achieved when Klöckner & Co holds the
majority of the voting rights or by other means is able to govern the financial and operating policy of an entity in
order to obtain the economic benefit from its activities.
Under the Group’s European asset-backed securitization programs (“ABS programs”) a total of 13 specialpurpose
entities were formed. None of the Group companies holds an equity interest in those special-purpose
entities, but they were established for the sole purpose of purchasing and collecting receivables of Klöckner & Co
subsidiaries. The economic substance of the relationship between Klöckner & Co and these special-purpose entities
indicates that these companies are also controlled by Klöckner & Co and are therefore to be included in the
consolidated financial statements. A further special entity which is responsible for the acquisition of trade
receivables under the American Program is consolidated under the general consolidation rules.
The financial statements of subsidiaries acquired or disposed of in the course of the financial year are included
in the consolidated financial statements from the time control is achieved to the time it is surrendered.
Intragroup receivables, liabilities and intercompany results are eliminated in consolidation. Consolidation
entries are subject to deferred taxes. Deferred tax assets and liabilities are offset against each other if the payment
term and levying taxation authority are identical.
F-129

The scope of consolidated companies changed as follows:
2008 2007
Consolidated companies at the beginning of the financial year .......................... 154 138
+ Acquisitions .............................................................. 4 18
+ Newly formed/consolidated companies .......................................... 2 7
- Mergers ................................................................. (15) (8)
- Disposals and liquidations .................................................... (42) (1)
Consolidated companies at the end of the financial year ............................... 103 154
(thereof German companies including Klöckner & Co SE) ........................... 10 13
6 (2007: 7) subsidiaries which do not have a significant impact on the Group’s net assets, financial results and
results of operations are not consolidated. Sales and net income of these entities represent less than 0.01% of
consolidated sales and net income, respectively. The impact on the Group’s equity amounts to –1.21%. Such
subsidiaries are accounted for as financial assets at cost as their fair value cannot be determined reliably.
A list of affiliated companies included in the consolidated financial statements is attached as annex.
(4) Significant accounting policies
Business combinations
Business combinations are accounted for under the purchase method whereby the cost of the investment is
offset against the investee’s net assets which is remeasured to fair value. The net assets are based on the fair values of
the assets and liabilities, including identifiable intangible assets and contingent liabilities to be recognized as
liabilities, as of the date of acquisition.
If published exchange or market prices cannot be obtained for allocating the purchase price, the fair values are
calculated on the basis of suitable valuation techniques. Generally, the discounted cash flow method is used in such
cases. Under this method, the expected future cash flows that can be generated by the asset are discounted to the date
of the initial consolidation using a discount rate reflecting the inherent risk associated to the asset.
Any remaining excess of the cost of the acquired company over its proportional share of net assets is
recognized separately as goodwill; any negative difference is upon reassessment of the acquired assets and
liabilities directly recognized in the income statement.
Subsequent changes in interests in consolidated subsidiaries that do not result in a loss of control are treated as
equity capital transactions.
Foreign currency translation
Transactions denominated in foreign currency are translated using the exchange rate at the time of the
transaction. Monetary items are translated using the current exchange rate at the balance sheet date. Irrespective of
any currency hedges, gains or losses from the remeasurement of monetary assets and liabilities are recognized in the
income statement as other operating income or expenses.
Applying the functional currency concept, the annual financial statements of the foreign subsidiaries prepared
in foreign currency are translated into euros. The functional currency is determined by the primary economic
environment in which the entity operates. All subsidiaries conduct their business independently in their domestic
markets. As such, the functional currency for those entities is the local currency. The assets and liabilities of
subsidiaries are translated at the middle rate of the balance sheet date, expenses and income are translated at the
average exchange rate of the reporting period. Differences arising from such translations applied to the assets,
liabilities and components of net income are reported as a separate component of equity and accordingly do not have
an impact on net income.
F-130

The exchange rate changes for the main currencies of the Group developed as follows:
Year-end rate Average rate
Dec. 31, 2008 Dec. 31, 2007 2008 2007
1 E =
US Dollar (USD) ................................. 1.3918 1.4721 1.4708 1.3704
Pound Sterling (GBP) .............................. 0.9525 0.7333 0.7963 0.6843
Swiss Franc (CHF) ................................ 1.4850 1.6547 1.5874 1.6427
Canadian Dollar (CAD) ............................ 1.6998 1.4449 1.5593 1.4678
Revenue recognition
Revenues from sales of goods are recognized when the material risks and rewards associated with ownership
have been transferred to the buyer and the amount of revenues can be reliably measured. This is generally the time
of delivery. Prior to delivery, revenues are only recognized when goods have not been delivered at the request of the
buyer but ownership has been transferred and the buyer has accepted billing. Sales are reported net of allowances
such as bonuses, trade discounts and rebates.
Interest income is accrued on a time basis by reference to the principal amount and the effective interest rate.
Dividend income is recognized when the right to receive payment has been established.
Share-based payment
The Group’s share-based compensation plans are virtual stock option plans with cash settlement (“VOP”). As
of the respective reporting date, a provision is recognized pro rata temporis in the amount of the fair value of the
payment obligation; any subsequent change in the fair value is recognized in profit or loss. After the expansion of
the program the fair value of the virtual share options is calculated on the basis of an option pricing model based on a
Monte Carlo simulation using the following parameters:
Risk-free rate of return ......................................................... 2.1–2.4
Expected volatility ............................................................ 85.0
Earnings per share
Earnings per share are calculated by dividing net income for the year attributable to shareholders of Klöckner &
Co SE by the average number of shares outstanding during the period. The dilutive, potential shares of the
outstanding convertible bond have been included in the calculation of diluted earnings.
Income taxes
Income tax expense represents the total of current and deferred tax expenses.
Current tax expenses are calculated on the basis of the taxable income for the financial year. The taxable
income differs from the income before taxes for the year reported in the income statement as it does not include
income or expenses that will not be taxable or tax deductible until later financial years, if at all. Tax liabilities are
measured at the amount for which payment to the taxation authorities is expected. The liabilities are measured at the
tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred taxes are calculated in line with the concept of the balance sheet liability method. Deferred tax assets
result from temporary differences in the carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable profits and from consolidation
entries. Such deferred tax assets or liabilities are not recognized if the temporary differences arise from goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
neither affects taxable profits or the accounting profits.
A deferred tax asset is also recognized for the carry-forward of unused tax losses to the extent that it is probable
that future taxable profit will be available against which the unused tax losses can be utilized.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow part of or the entire deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each
F-131
%

alance sheet date and a previously unrecognized deferred tax asset is recognized to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are calculated using tax rates that have been enacted or substantively enacted
by the balance sheet date. The measurement of deferred tax liabilities and deferred tax assets reflects the tax
consequences that would follow from the manner in which Klöckner & Co expects, at the balance sheet date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right to set off current tax
assets against current tax liabilities exists and the deferred tax assets and the deferred tax liabilities relate to income
taxes levied by the same taxation authority and a net settlement is intended.
Current and deferred taxes are recognized in income unless they relate to items that are recognized directly in
equity. In such cases, they are also charged or credited to equity.
Intangible assets
Intangible assets with finite useful lives are carried at cost less accumulated amortization if the use of the asset
entails an economic benefit and the costs of the asset can be reliably determined. Intangible assets are amortized on
a straight-line basis in line with their estimated useful life over a period generally between two and 15 years. The
useful life is reviewed annually and future expectations are adjusted if necessary. Intangible assets with an indefinite
useful life that are not being amortized are reviewed for impairment annually or more frequently if indications for
impairment arise.
Property, plant and equipment
Property, plant and equipment is carried at acquisition or manufacturing cost less accumulated depreciation.
The manufacturing costs comprise all direct costs as well as attributable overheads, with the exception of financing
costs. Administrative costs are capitalized to the extent they relate to production.
Maintenance and repair costs are expensed as incurred.
Property, plant and equipment subject to depreciation is amortized on a straight-line basis. On disposal or
retirement, the cost and the corresponding accumulated depreciation are derecognized, any gain or loss is
recognized in income.
Depreciation is based on the following useful lives:
Useful life in years
Office buildings ......................................................... 30–50
Factory and warehouse buildings ............................................. 20–40
Plant facilities similar to buildings, warehouse and crane equipment and other technical
equipment ............................................................ 4–20
Operating and office equipment .............................................. 3–15
Leases
Assets held under finance leases are initially recognized at fair value at the inception of the lease, or if lower, at
the present value of the minimum lease payments. The corresponding liability is included in the balance sheet as
financial liability. Assets held under finance leases are depreciated over their expected useful lives, or where shorter,
the term of the underlying lease.
Investment Property
Land and buildings held to earn rentals or for capital appreciation rather than for use in the delivery of goods or
for providing services or for administrative purposes are presented as investment property. Measurement of such
property follows the cost model. The fair values of such property are disclosed in Note (15) Intangible assets,
property, plant and equipment and investment property.
Depreciation methods and useful lives are similar to those for property, plant and equipment.
Impairment
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to
determine if there is any indication of impairment. If such indication exists, the recoverable amount of the asset is
F-132

estimated to determine the extent of the impairment loss. The recoverable amount is the higher value of the fair
value less costs to sell and the value in use. In those instances in which the recoverable amount for the specific asset
cannot be estimated, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is
increased to the extent that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognized immediately as income.
Goodwill arising from the acquisition of subsidiaries is tested for impairment at least annually. The impairment
test is performed at the level of the cash-generating unit to which the goodwill has been assigned. Cash-generating
units are the lowest reporting level in the Group at which management monitors goodwill for internal reporting
purposes. For the Klöckner & Co Group the national sub-consolidation groups generally represent the cashgenerating
units. The annual impairment test for goodwill is performed in the fourth quarter of each financial
year — or more frequently when there is an indication that the unit may be impaired. If the carrying amount exceeds
the recoverable amount, an impairment loss is recognized in the amount of the difference and cannot be reversed in
subsequent periods.
The recoverable amount is the higher value of fair value less cost to sell and value in use. Value in use or fair
value less cost to sell is usually determined using a discounted cash flow approach. The estimated cash flows are
based on the Company’s current business plan for the following three years, based on management’s estimates for
the respective business unit. The interest rates used reflect the risk specific to the underlying business and the
country in which the business is operated.
Impairment losses are reported in the income statement under impairment losses. Reversals of impairment
losses are included in other operating income.
Inventories
Inventories are stated at the lower of cost and net realizable value. The manufacturing costs comprise
production-related costs calculated on the basis of normal capacity. In addition to the directly attributable costs,
material and production overhead expenses including depreciation are reflected in the manufacturing costs. Cost is
generally assigned to inventories on the basis of the monthly moving average method. In selected cases the specific
identification method is applied.
Financial instruments
Financial instruments are any contracts that give rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
The Group’s financial assets primarily consist of cash and cash equivalents, available for sale financial
instruments, trade receivables and derivative financial instruments with positive fair values. The Group’s financial
liabilities include bonds, liabilities due to banks, trade payables, finance lease liabilities and derivative financial
instruments with negative fair values.
The Klöckner & Co Group recognizes all regular-way contracts as of the settlement date regardless of their
classification. For derivative financial instruments classified as held for trading the Group applies trade date
accounting.
The fair value option provided by IAS 39 (Financial Instruments: Recognition and Measurement) is not
applied.
Financial instruments are initially measured at fair value, plus transaction costs directly attributable to the
acquisition or issue unless such financial instruments are classified at fair value through profit or loss. Subsequent
measurement of financial assets and liabilities depends on the financial instruments classification to categories of
IAS 39.
a) Financial assets and financial liabilities (excluding derivative financial instruments) and equity instruments
issued by Klöckner & Co
Cash and cash equivalents include cash on hand, bank balances and short-term securities with an original
maturity of less than three months with an insignificant risk of changes in value and are stated at nominal value.
Foreign currency balances are converted into euros at the bid-rate on the balance sheet date.
F-133

Financial assets at fair value through profit or loss include financial assets initially classified as held for
trading. In the Klöckner & Co Group, this classification only applies for derivative financial instruments unless
designated in a documented hedge. Such instruments are presented as other assets in the Group’s consolidated
financial statements.
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Loans and receivables are measured at amortized cost using the effective interest method. Also assigned to
this category are non-current loans and non-current securities that do not have a quoted market price in an active
market, which are measured at amortized cost.
All identified risks are allowed for by making appropriate valuation adjustments to reflect the risk of default,
taking into account the credit insurance that is in place. The carrying amounts of financial assets are assessed for
impairment if there is objective evidence, such as substantial financial difficulty on the part of the obligor,
knowledge of insolvency proceedings or being overdue.
Non-derivative financial assets that are not assigned to any of the other categories described in IAS 39 are
classified as available for sale financial assets and are measured at fair value. Such assets include shares in
unconsolidated subsidiaries and other equity instruments that do not have a quoted market price in an active market
and whose fair value cannot be reliably measured which are accounted for at cost. If required valuation allowances
are established through profit or loss to account for an impairment loss. Impairment losses are reversed when the
reasons for such impairment losses no longer apply unless they relate to available for sale financial assets that are
accounted for at cost for which no reversal of impairment losses is allowed.
Financial instruments are initially recognized as a financial liability or an equity instrument in accordance with
the substance of the contractual agreement. An equity instrument is any contract that evidences a residual interest in
the assets of the entity after deducting all its liabilities. An equity instrument is recognized in the amount of the
proceeds received from the issuance less directly attributable transaction costs.
The components of compound financial instruments such as the convertible bond are recognized separately as
financial liabilities and equity. The fair value of the liability component was calculated using a market interest rate
for equivalent financial instruments without conversion rights. Subsequent accounting of the liability component
will be on an amortized cost basis until conversion or maturity of the bond. In line with the residual method the
remaining difference represents the equity component which is reported within capital reserves with no subsequent
adjustment. Financial liabilities are either classified as fair value through profit or loss or other financial liabilities.
Klöckner & Co Group only classifies derivative financial instruments that are not designated as hedge and are
effective as liabilities measured at fair value through profit or loss. The negative fair value of such instruments is
reported under other liabilities.
Other financial liabilities, including borrowings, are initially recognized at fair value less transaction costs.
After initial recognition, other financial liabilities are measured at amortized cost using the effective interest
method.
b) Derivative financial instruments
The Group uses a variety of derivative financial instruments to manage its exposure to interest and foreign
exchange rate risks. These include forward exchange transactions, currency swaps, cross currency swaps, interest
rate swaps and interest rate collars. Further information is disclosed in Note (30) Derivative financial instruments.
Derivative financial instruments are initially reported at fair value at the conclusion of the agreement. The fair
value is adjusted at each subsequent balance sheet date. Any gain or loss arising from a change in the fair value of a
derivative financial instrument that is not part of a cash flow hedging relationship and for which the hedging
relationship is effective is recognized in the income statement. For derivative financial instruments designated in a
hedging relationship the timing of the recognition of gains or losses is dependent on the nature of the hedge. The
Klöckner & Co Group uses certain derivative financial instruments to hedge recognized assets or liabilities. In
addition, hedge accounting is applied for certain unrecognized firm commitments.
Forward exchange transactions are valued on an item-by-item basis at the forward rate on the balance sheet
date, and exchange rate differences arising because of the contracted forward exchange rate are included in the
income statement.
Interest rate swap amounts from interest rate swap agreements are recognized in the income statement at the
payment date or the balance sheet date. In addition, interest swap agreements as well as interest rate caps are carried
F-134

at their fair value as of the balance sheet date, and, provided that no hedge accounting is applied, changes in the fair
values are recognized in the income statement for the current reporting period.
Derivative financial instruments designated in hedging transactions are classified as non-current assets or
liabilities if the remaining term of the hedging relationship is more than twelve months or as current assets or
liabilities, respectively, if the remaining term of the hedging relationship is less than twelve months.
Derivative financial instruments not designated in a hedging relationship are classified either as current assets
or liabilities.
c) Hedge accounting
Depending on volume, term and risk structure, the Klöckner & Co Group designates individual derivative
financial instruments as cash flow hedges.
The relationship between the hedged item and the hedging instrument including the risk management
objectives and the strategy for undertaking the hedge transaction are documented at the inception of the hedge.
In addition, at the inception of a hedging transaction and over its term, the Company regularly reviews and
documents whether the hedge is highly effective in terms of compensating the changes in the cash flows of the
hedged item.
Information on the fair values of these derivative financial instruments is provided in Note (30) Derivative
financial instruments; changes in the reserve for fair value adjustments of financial instruments within equity can be
derived from the statement of changes in equity.
Cash flow hedges
The effective portion of the change in the fair value of derivative financial instruments designated as cash flow
hedges is recognized in equity; the ineffective portion is recognized directly in income or loss. The amounts
recognized in equity are reclassified to profit or loss in the period in which the hedged item is recognized in income.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or is no
longer deemed effective. Any cumulative gain or loss deferred in equity at that time remains in equity and is
recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no
longer expected to occur, the cumulative profit or loss deferred in equity is immediately recognized in income or
expense.
Non-current assets held for sale and associated liabilities
Non-current assets or groups of such assets which are disposed of in a single transaction (disposal groups)
including the associated liabilities are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is met only when the
disposal is highly probable and the asset or disposal group is available for immediate sale in its present condition.
Depreciation and amortization is no longer recognized on assets held for sale. They are carried at the lower of
the carrying amount and fair value less costs to sell.
Provisions for pensions and similar obligations
Pension obligations arising from defined benefit plans are determined using the projected unit credit method.
The expected benefits, including dynamic components, are recognized over the total service period of the respective
employee. Actuarial advice has been obtained.
Actuarial gains or losses resulting from deviations between forecast and actual changes in plan beneficiaries as
well as actuarial assumptions that exceed 10% of the greater of the present value of the defined benefit obligation
and the fair value of plan assets are amortized over the expected remaining working lives of the participating
employees.
Service costs are reported in personnel expenses, the interest costs in interest expenses.
Any surplus of the assets over the liabilities to be recognized is limited to the cumulative, unrecognized,
actuarial losses and past service cost, plus the present value of any available refunds and the reduction of future
contributions to the plan.
Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise
amortized on a straight-line basis over the average service period until the benefits become vested.
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Employer contributions made by the Klöckner & Co Group to an independent entity under defined contribution
plans and to which no further legal or constructive payment obligations may arise are expensed as incurred.
Other provisions
In accordance with IAS 37 (Provisions, Contingent Liabilities and Contingent Assets), and with IAS 19
(Employee Benefits) if applicable, other provisions allow for all identified obligations and anticipated losses, as
well as all uncertain liabilities, provided they are present obligations and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligations, and that reliable estimate can be made of the
amount of the obligation. A provision is only established for legal or constructive obligation against third parties.
Provisions are recognized at the amount which represents the best estimate of the expenditure required to settle
the present obligation. Any reimbursement is treated as a separate asset and accordingly is not offset against the
provision. Where the effect of the time value of money is material, the amount of the provision is the present value of
the expenditure expected to be required to settle the obligation. The present value is calculated using interest rates
that reflect current market assessments and the risks specific to the liability.
Contingent liabilities
Contingent liabilities are possible obligations that arise from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the enterprise or that represent a present obligation that arises from past events but is not recognized
because it is not probable that an outflow of resources will be required to settle the obligation or the amount of the
obligation cannot be measured with sufficient reliability. Unless the possibility of any outflow in settlement is
remote a description of the nature of the contingent liability is provided.
Presentation of the consolidated balance sheets and statement of income
Individual items have been combined in the consolidated balance sheet and the consolidated statement of
income; further information is provided separately in the notes to the consolidated financial statements. Assets that
will be realized within twelve months of the reporting date, as well as liabilities that will be settled within one year
of the reporting date, are classified as current.
The income statement is prepared according to the nature of expense method.
Use of estimates
The preparation of the consolidated financial statements requires the Klöckner & Co Group to make
assessments, estimates and assumptions influencing the application of accounting policies in the Group and the
reporting of assets, liabilities, income and expenses. The actual amounts may differ from these estimates. The
estimates and the underlying assumptions are reviewed on an ongoing basis. Adjustments to estimates are
recognized in the period in which the estimate is revised, if the change affects only that period or in the period
of the revision and subsequent periods if both periods are affected.
Estimates are particularly necessary for the valuation of intangible assets (e.g. in purchase price allocations),
the recognition and measurement of deferred tax assets, the accounting for pension and other obligations as well as
for impairment tests in accordance with IAS 36.
New accounting standards and interpretations
In the 2008 business year the revised standards IAS 39 (Financial Investments: Recognition and Measurement
with the addition of the provision of the use of the fair value option) and IFRS 7 (Financial Investments:
Disclosures) as well as the IFRIC 11 interpretation (IFRS 2 — Group and Treasury Share Transaction) were applied
for the first time. The application did not have an impact on the consolidated financial statements.
In addition the International Accounting Standards Board (IASB) and IFRIC have issued the following
standards and interpretations that are applicable for the Group but whose application is not yet mandatory in the
reporting period. The application of the standards and interpretations is subject to endorsement by the EU, which for
certain standards and interpretation is yet outstanding. Further standards and interpretations issued during the
reporting period which are not further discussed in the following paragraphs will not have an impact on the Group’s
financial statements.
The IASB published IFRS 8 (Operating Segments) in November 2006. Under IFRS 8, the reporting segments
of an entity are defined in line with the internal reporting organization (“Management Approach”). The standard is
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to be applied for financial years beginning on or after January 1, 2009. First-time adoption will not have significant
effect on the consolidated financial statements for Klöckner & Co.
In March 2007, the IASB published the amended standard IAS 23 (Borrowing Costs). In line with this
standard, borrowing costs that are directly attributable to the acquisition, construction or manufacture of a
qualifying asset must be capitalized. The standard is to be applied for financial years beginning on or after
January 1, 2009. Klöckner & Co expects that the first-time adoption of the amended standard will not have
significant impact on the consolidated financial statements.
In June 2007 the IFRIC issued IFRIC 16 (Hedges of a Net Investment in a Foreign Operation). The
interpretation addresses the question of which risks are eligible for hedge accounting under IAS 39. The application
of the interpretation, which is mandatory for the following financial year, will not have an impact on Klöckner &
Co’s consolidated financial statements.
The interpretation IFRIC 14 (The Limit on a Defined Benefit Asset, Minimum Funding Requirements and
their Interaction), which was published in July 2007, provides general guidance on how to assess the limit in IAS 19
on the amount of the surplus of a pension plan that can be recognized as assets. It also explains how statutory or
contractual minimum funding requirements can affect pension assets or liabilities. The interpretation is to be
applied for financial years beginning on or after January 1, 2009. Klöckner & Co is currently investigating the
effects of the first-time application of the interpretation on the consolidated financial statements.
The revised version of IAS 1 (Presentation of Financial Statements) published by the IASB in September 2007
requires among other things separate presentation of changes in equity attributable to transactions with shareholders.
The standard must be applied for financial years beginning on or after January 1, 2009. The first-time
application of the amended standard will result in changes of presentation of changes in equity in the consolidated
financial statements.
In January 2008, the IASB published amendments (Amendments to IFRS 2 — Vesting Conditions and
Cancellations) to IFRS 2 (Share-based Payment) to clarify the terms vesting conditions and cancellations. Vesting
conditions are service conditions and performance conditions only. Under the amendment, features of a share-based
payment that are not vesting conditions should be included in the grant date fair value of the share-based payment.
All cancellations, whether by the entity or by other parties, should receive the same accounting treatment. The
amendment is effective for annual periods beginning on or after January 1, 2009. Klöckner & Co does not expect
that the application of this standard will have a material impact on the consolidated financial statements.
In January 2008, the IASB published revised versions of IFRS 3 (Business Combinations) and IAS 27
(Consolidated and Separate Financial Statements). Significant changes from the previous standards relate among
other things to the recognition and measurement of assets and liabilities acquired in a business combination, the
calculation of goodwill, the treatment of acquisition-related cost and the presentation of contingent considerations.
The revised standards have not yet been endorsed for use in the EU. Klöckner & Co is currently evaluating the
potential effects of the revised standards which are to be applied for business combinations in financial years
starting on or after July 1, 2009.
In May 2008 the IASB issued “Improvements to IFRS” which affected 20 IFRS with both editorial changes
and modifications that can effect presentation, recognition and measurement. Unless otherwise specified in the
respective standard, the application of the amendments must be applied for annual periods beginning on or after
January 1, 2009. Klöckner & Co does not expect that the application of the amendments will have a material impact
on the consolidated financial statements.
(5) Acquisitions and disposals
The Group structure changed as a result of the following acquisitions and disposals in financial years 2008 and
2007.
Acquisitions 2008
Taylor Equipment and Machine Tool Corporation
In April 2008, Klöckner & Co entered into an agreement to acquire the operating assets of the distribution
company Taylor Equipment and Machine Tool Corporation (Temtco), headquartered in Louisville, Mississippi,
USA. The acquisition is deemed to be a material business combination under IFRS 3. The activities have been
included in the Group’s consolidated financial statement since closing on May 5, 2008. Temtco Steel employs 180
staff in five locations in the US and generated sales of approximately A226 million in 2007.
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The effects of the purchase price allocation are as follows:
Carrying amounts and fair values
as of initial consolidation date
Carrying amounts Adjustments
(in E million)
Fair values
Assets
non-current ....................................... 3.4 57.2 60.6
thereof goodwill ................................... 0.0 9.3 9.3
current .......................................... 75.6 5.1 80.7
Liabilities
current .......................................... 18.9 0.0 18.9
Net assets acquired .................................. 60.1 62.3 122.4
Purchase price ..................................... 122.4
thereof paid in cash or cash equivalents .................. 122.4
The fair value of non-current assets includes A42.4 million customer relationships and with A5.2 million the
trade name. Goodwill primarily represents future earnings expectations.
The contribution of Temtco to consolidated sales as of December 31, 2008 was A149.8 million; the
contribution to consolidated net income amounts to A8.2 million. The consolidated sales would have been
A94.5 million higher and the consolidated net income would have been A7.3 million higher, if the acquisition
had occurred on January 1, 2008.
Other acquisitions in 2008
In January 2008, the transaction to acquire a controlling stake of 77.3% from 7.3% previously held in
Metalsnab Holding AD (Metalsnab), Sofia, Bulgaria, was completed. The name of the company was subsequently
changed to Klöckner Metalsnab Holding AD, Sofia, Bulgaria.
Metalsnab has been included in the consolidated financial statements since January 1, 2008. After control was
obtained the Group acquired further stakes of 22.5% in the third quarter of 2008. With 99.8% the Group now holds
almost the entire shares of Metalsnab. By these acquisitions the minority interest was reduced by A4.2 million; the
remaining difference of A0.1 million between cost and acquired net assets was offset against retained earnings
attributable to the shareholders of Klöckner & Co SE.
Also in January 2008, Klöckner & Co acquired 100% of the shares in Multitubes Ltd. (Multitubes), Brierley
Hill, West Midlands, United Kingdom. The company was initially consolidated on January 1, 2008. The 2007 sales
amounted to A5 million, generated by 16 employees.
By agreement of May 21, 2008, Sherex Industries Ltd. (Sherex), New York, USA, was acquired. Sherex is part
of the disposal group Koenig Verbindungstechnik AG, Dietikon, Switzerland (KVT Group).
The carrying amounts and fair values at the date of the other acquisitions were as follows:
Carrying amounts and fair values
as of initial consolidation date
Carrying amounts Adjustments
(in E million)
Fair values
Assets
non-current ....................................... 14.0 0.9 14.9
thereof goodwill ................................... 0.0 0.9 0.9
current .......................................... 18.1 2.2 20.3
Liabilities
non-current ....................................... 1.5 0.0 1.5
current .......................................... 12.4 0.9 13.3
Net assets acquired .................................. 18.2 2.2 20.4
Minority interests .................................... 4.0 0.0 4.0
Excess of net assets over cost .......................... (1.2)
Purchase prices ..................................... 15.2
thereof paid in cash or cash equivalents .................. 15.2
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The contribution of the other acquisitions to sales and net income for the year period amounted to A47.6 million
and �A5.2 million, respectively. If all companies had been first consolidated on January 1, 2008 the contribution to
sales and net income would have been A49.0 million and �A5.4 million respectively.
Acquisitions 2007
Primary Steel LLC
In April 2007, Namasco Corporation, Wilmington, Delaware, USA, signed an agreement to purchase a 100%
stake in the distribution corporation Primary Steel LLC (“Primary”), with head offices in Middletown, Connecticut,
USA, and two subsidiaries. Since closing on May 11, 2007, Primary has been consolidated. The cost of the
acquisition amounted to A179.8 million. Primary operates seven branches in North America and employs some 400
staff. Upon completion of the purchase price allocation goodwill of A69.9 million was recognized. Separately from
goodwill, customer relationships and a trade name were recognized at A63.6 million.
Other acquisitions
Date of initial consolidation
Tournier-Holding S.A.S. Group, Lagny-sur-Marne, France. .................... January 1, 2007
Teuling Staal B.V., Barendrecht, The Netherlands ........................... April 1, 2007
Westok Ltd., Horbury, United Kingdom . . ................................ April 1, 2007
Edelstahlservice Verkaufsgesellschaft mbH, Frankfurt ........................ May1,2007
Premier Steel Inc., Shreveport, USA. .................................... May24,2007
Max Carl GmbH & Co. KG, Coburg *) ................................... June 1, 2007
Zweygart Fachhandelsgruppe GmbH & Co. KG, Stuttgart *) .................... June 1, 2007
Interpipe (UK) Ltd., Dudley, United Kingdom ............................. September 30, 2007
Farmington Group, Inc., Madison, USA . . ................................ November 1, 2007
ScanSteel Service Center, Inc., Jeffersonville, USA *) ......................... November 1, 2007
Lehner et Tonossi S.A., Siders, Switzerland ............................... December 31, 2007
*) Asset deal
The acquisition costs for these business combinations amounted to A85.3 million. The purchase price
allocation resulted in goodwill of A17.7 million and excess of the net assets acquired over the purchase price
of A1.8 million which was immediately recognized in income.
Acquisition of minority interests
2008
In the first six months of 2008, Klöckner & Co Group acquired another 22.0% of the shares in Debrunner
Koenig Holding AG (DKH), Switzerland, at a purchase price of approximately A126.7 million. Klöckner & Co now
holds 100% in DKH. As a result of this transaction, the minority interests were reduced by A55.4 million. The
difference between the acquired net assets in DKH and the purchase price was debited to the controlling equity
interest and therefore has no effect on net income. Accordingly, the equity attributable to shareholders of
Klöckner & Co SE was reduced by A71.2 million.
2007
In May 2007, Klöckner & Co acquired an additional stake of 18.1% in DKH and then held a 78.0% stake as of
December 31, 2007.
Disposals
2008
To further concentrate on the Group’s core business the following entities were disposed of in 2008:
With effect from July 8, 2008 the sale of the Canadian subsidiary Namasco Ltd. was completed, the
primary business of which is the processing of flat-rolled metal products for the North American automotive
industry.
F-139

On September 4, 2008 the Group disposed of its interests in the Koenig Verbindungstechnik AG group
(KVT). KVT’s business activity is concentrated in the markets of fastening systems and sealing plugs.
Based on the carrying amounts as of the respective disposal date the impact on the consolidated financial
statements was as follows:
(E million)
Assets
non-current ................................................................ 34.5
current. ................................................................... 152.3
186.8
Liabilities
non-current ................................................................ 6.9
current. ................................................................... 59.9
66.8
Disposed net assets. ........................................................... 120.0
The disposals resulted in gains of approximately A273.4 million which are largely attributable to the sale of
KVT.
2007
In July 2007, Klöckner & Co sold 49% of its interest in Klöckner Information Services GmbH (KIS) to the IT
consultant Bitempo GmbH, Düsseldorf. Under the share purchase agreement Bitempo GmbH has been granted a
put option for its shares. The put option has been recognized at the present value of the obligation (A1.5 million) and
is included in other liabilities.
Notes to the consolidated income statement
(6) Specific items recognized in net income
In addition to the gain on sale of subsidiaries (see Note (5) Acquisitions and disposals) the Group’s net income
is impacted by the following special items:
Global Settlement Balli
Based on agreement (Global Settlement) reached in the third quarter, all disputes in connection with the former
shareholder Balli were settled. The reversals of provisions for risks and pending litigation, allowances for bad debt
and other liabilities resulted in a net gain of A38.7 million, which is included in other income.
Antitrust action against KDI
The French antitrust authority “Conseil de la Concurrence” announced on December 16, 2008 that it had
imposed fines of about A575 million on steel distributors in France, of which A169.3 million were charged against
the French subsidiary KDI S.A.S. It was alleged that the company had taken part in an anti-competitive price-fixing
scheme throughout the period from 1999 until 2004. KDI S.A.S. has appealed the fine with the aim of significantly
reducing the amount.
The fine negatively impacts the 2008 Group results of Klöckner & Co by a total of A79 million. Provisions had
been established in the preceding years in the amount of A20 million. In addition, the Group is entitled to a
compensation totaling A70 million towards previous owners of the Klöckner & Co Group resulting from the sale of
the Group in 2005. The expenses for the increased provisions (A149 million) are presented net of the compensation
as other operating expense (A79 million) in accordance with IAS 37.54.
Rescission of sale of the Valencia premises
Triggered by the real estate and financial market crises in Spain the acquirer of the Valencia premises was no
longer able to meet his payment obligations, and the sale of the Valencia premises was rescinded, resulting in other
operating expenses of A18.2 million.
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(7) Sales
Group sales are broken down by region as follows:
2008 2007
(E thousand)
Germany ......................................................... 1,462,369 1,430,031
EU excluding Germany .............................................. 2,861,410 2,905,313
Rest of Europe. .................................................... 901,318 760,105
North America ..................................................... 1,379,522 1,079,119
Central and South America ........................................... 19,054 8,966
Asia/Australia ..................................................... 26,669 21,448
Africa . . ......................................................... 99,253 69,161
Sales by region .................................................... 6,749,595 6,274,143
(8) Other operating income
2008 2007
(E thousand)
Foreign currency exchange gains ........................................... 23,448 5,642
Reversal of provisions ................................................... 8,138 22,847
Global Settlement Balli . . . ............................................... 38,718 —
Gain on sale of consolidated subsidiaries ..................................... 273,445 —
Gain on sale of non-current assets .......................................... 4,833 39,948
Income from impaired receivables .......................................... 3,886 3,975
Rental income ......................................................... 4,349 3,631
Excess of net assets over the purchase price of acquired subsidiaries. ................ 1,198 5,068
Other income ......................................................... 13,167 15,578
Other operating income. ................................................ 371,182 96,689
The increase in other income is largely driven by the gain on sale of the non-core activities KVT and Namasco
Ltd. as described in Note (5) Acquisitions and disposals. Also included therein are net gains from the global
settlement with the former shareholder Balli. Also refer to Note (6) Specific items recognized in net income.
Excess of net assets over the purchase price of acquired subsidiaries relate to the purchase price allocation of
Metalsnab.
Other income comprises A1,847 thousand (2007: A2,504 thousand) excess customer payments for which the
statute of limitation has been exceeded or credits which are not offset from/to customers and uncharged supplier
deliveries and services as well as several income items each in the amount of less than A1.5 million.
Foreign currency exchange gains and losses resulting from the extension of Group internal financial
receivables or financial liabilities are presented on a net basis as other income or other expenses. As such foreign
currency exchange gains of A7,497 thousand (2007: A13,452 thousand) and foreign currency exchange losses of
A6,109 thousand (2007: A13,519 thousand) have been offset against each other.
(9) Cost of materials
2008 2007
(E thousand)
Cost of materials and supplies, and purchased merchandise .................... 5,387,035 5,050,163
Cost of purchased services ............................................ 7,382 7,774
Cost of materials .................................................. 5,394,417 5,057,937
F-141

(10) Personnel expenses
2008 2007
(E thousand)
Wages and salaries .................................................... 448,669 412,964
Social security contributions and expenses for welfare benefits .................... 84,707 80,384
Retirement benefit cost ................................................. 12,896 15,812
Personnel expenses ................................................... 546,272 509,160
The increase in personnel expenses is primarily due to the Temtco acquisition and the full year inclusion of last
year’s acquisition of Primary as well as due to initiated restructurings and the respective expenses. The majority of
the personnel expenses relate to remuneration, which comprises wages, salaries, compensation and all other
remuneration for work performed by employees of the Group in the financial year. The mandatory statutory
contributions to be borne by the Company, including in particular social security contributions, are reported under
social security contributions.
Retirement benefit expenses relate to active and former staff or their surviving dependents. These expenses
include net periodic pension costs, employer contributions to supplementary occupational pension plans and
retirement benefit payments by the Company for its employees.
In the year under review, the following average staff was employed in the Klöckner & Co Group:
2008 2007
Salaried employees ...................................................... 5,814 5,434
Wage earners . ......................................................... 4,591 4,586
Apprentices. . . ......................................................... 276 274
10,681 10,294
(11) Other operating expenses
2008 2007
(E thousand)
Forwarding costs (transportation logistics) ................................... 111,303 108,832
Antitrust action against KDI ............................................. 79,300 5,000
Rents and leases ...................................................... 69,873 66,344
Repairs and maintenance ................................................ 50,470 49,315
Third-party services .................................................... 38,661 34,526
Supplies ............................................................ 49,252 37,468
Audit fees and consulting ............................................... 20,508 18,449
Other taxes .......................................................... 23,830 19,768
Rescission of the sale of the Valencia premises. ............................... 18,215 —
Travel costs. ......................................................... 16,782 16,438
Postal charges and telecommunications ..................................... 10,708 9,551
Bad debt expense ..................................................... 11,731 5,261
Credit insurance ...................................................... 8,936 9,814
Other insurance ....................................................... 9,738 9,939
Advertising and representation expenses ..................................... 10,988 9,117
Foreign exchange rate losses ............................................. 23,928 5,828
Other expenses ....................................................... 36,389 38,379
Other operating expenses .............................................. 590,612 439,029
For further information on the French antitrust action and the rescission of the Valencia premises refer to
Note (6) Specific items recognized in net income.
Other expenses include fringe benefits, office materials, expenses arising from secondary business and
incidental bank charges.
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(12) Financial result
2008 2007
Income from non-current securities and long-term loans. .........................
(E thousand)
16 12
Other interest and similar income .......................................... 6,965 4,986
Interest and similar expenses. ............................................. (68,731) (95,296)
Interest cost for post-employment benefits .................................... (8,032) (6,858)
Interest income, net ................................................... (69,782) (97,156)
Impairment losses for non-current securities .................................. — (15)
Financial result ....................................................... (69,782) (97,171)
Prior year’s interest income, net was burdened by early repayment charges and redemption costs incurred in
connection with the early redemption of the outstanding high yield bond (A38 million).
(13) Income taxes
a) Income tax expense in the income statement
The income taxes comprise current and deferred taxes. The utilization of tax loss carryforwards resulted in
increased income tax expense of A6,374 thousand (2007: A5,787 thousand) in 2008 due to the corresponding release
of deferred tax assets. The first time recognition of deferred tax assets for loss carryforwards in 2008 led to a
deferred tax benefit of A2,452 thousand (2007: A10,162 thousand).
In 2008 current tax expense of A850 thousand (2007: tax benefits A2,628 thousand) related to prior periods.
In the financial years 2008 and 2007, income tax expense for the Klöckner & Co Group is broken down as
follows:
2008 2007
(E thousand)
Current income tax expense .............................................. 77,774 55,016
Expense (domestic) ...................................................... 737 351
Expense (foreign) ....................................................... 77,037 54,665
Deferred income tax expense/benefit ........................................ 1,480 (1,437)
Benefit/expense (domestic) ................................................ (1,845) 1,296
Expense/benefit (foreign). ................................................. 3,325 (2,733)
Income tax expense ..................................................... 79,254 53,579
The combined income tax rate amounts to 30.7% comprising the corporate income tax including the solidarity
surcharge of 15.8% and trade tax of 14.9%.
The expected tax expense is reconciled to the actual tax expense as follows:
2008 2007
(E thousand)
Expected tax rate. ..................................................... 30.70% 39.00%
Income before income taxes. ............................................ 463,227 209,635
Expected tax expense at domestic tax rate ................................... 142,211 81,757
Foreign tax rate differential .............................................. (28,910) (19,242)
Tax rate changes ...................................................... (886) 1,505
Reduced tax rate ...................................................... — (5,109)
Tax reduction due to tax-free income . . ..................................... (80,192) (1,542)
Tax increase due to non-deductible expenses ................................. 68,796 5,322
Current income tax levied for prior periods .................................. 850 (2,628)
Other permanent differences ............................................. — 803
Excess of net assets over the purchase price of acquired subsidiaries ................
Tax reduction due to first-time recognition of deferred tax assets on loss carryforwards
(368) (1,094)
and temporary differences related to prior periods ............................ (5,626) (7,958)
F-143

2008 2007
(E thousand)
Tax decrease due to non-capitalization of deferred tax assets on loss carryforwards and
temporary differences in prior periods .................................... (18,793) (1,809)
Tax increase due to non-capitalization of deferred taxes on loss carryforwards. ........ 1,956 204
Tax increase due to Group internal transfer of entities .......................... — 2,694
Other tax effects ...................................................... 216 675
Effective income taxes ................................................. 79,254 53,579
Effective tax rate ..................................................... 17.11% 25.56%
b) Taxes recognized directly in equity
Current and deferred taxes are generally recognized as income or expense and included in the net profit or loss
for the period, except to the extent that the tax arises from a transaction or event which is recognized, in the same or a
different period, directly in equity. Taxes recognized directly in equity amounted to A8,113 thousand
(2007: A585 thousand).
c) Deferred tax assets and liabilities
Deferred tax assets and liabilities are presented in the balance sheet as follows:
Dec. 31,
2008
Dec. 31,
2007
(E thousand)
Deferred tax assets ..................................................... 46,491 33,336
Deferred tax liabilities .................................................. 85,028 82,364
Deferred taxes, net .................................................... (38,537) (49,028)
ASSETS
Deferred tax assets and liabilities arise from the following:
Dec. 31,
2008
Dec. 31,
2007
(E thousand)
From temporary differences and consolidation operations. ......................... 34,878 19,528
Intangible assets ...................................................... 2,147 3,219
Property, plant and equipment ............................................ (1,138) (1,227)
Inventories . ......................................................... 6,739 2,439
Provisions for pensions and similar obligations ................................ 7,023 9,614
Other provisions and accrued liabilities ..................................... 4,227 3,060
Liabilities . . ......................................................... 15,697 1,231
Other items . ......................................................... 183 1,192
From tax loss carryforwards *) .............................................. 11,613 13,808
Deferred tax assets ..................................................... 46,491 33,336
*) Including interest carryforward
F-144

EQUITY AND LIABILITIES
Dec. 31,
2008
Dec. 31,
2007
(E thousand)
From temporary differences and consolidation operations. ......................... 85,028 82,364
Intangible assets ...................................................... 4,948 9,835
Property, plant and equipment ............................................ 40,831 42,075
Non-current financial assets .............................................. (550) (540)
Inventories . ......................................................... 19,753 19,937
Receivables and other current assets. ....................................... 8,721 1,923
Provisions for pensions and similar obligations ................................ (5,591) (5,935)
Other provisions and accrued liabilities ..................................... 15,131 15,469
Other items . ......................................................... 1,785 (400)
Deferred tax liabilities ................................................... 85,028 82,364
A deferred tax asset for unused tax losses is only recognized if it is probable that this benefit can be realized.
Unused tax loss carryforwards as of the reporting date amount to A216.4 million (2007: A224.0 million) for
corporate income tax losses of foreign and domestic entities and trade tax and similar losses of A120.2 million
(2007: A118.6 million). Corporate income tax losses incurred by foreign and domestic subsidiaries of A184.8 million
(2007: A182.9 million) and trade tax and similar losses of A90.9 million (2007: A91.5 million) were not recognized
because it is not probable that they will be used.
The major part of the tax loss carryforwards do not expire under the current tax regulations, unless specific
circumstances arise (e.g. change of control). To the extent tax loss carryforwards do expire, this will not occur prior
to 2014.
Consistent with deferred tax assets for tax loss carryforwards a deferred tax asset is recognized for all
deductible temporary differences to the extent that it is probable that taxable profit will be available against which
the deductible temporary difference can be utilized.
Deferred tax assets were not recognized for temporary differences amounting to A85.5 million (2007:
A130.4 million) at December 31, 2008, as is not probable that the benefits can be realized.
Unrecognized deferred tax assets are as follows:
Dec. 31,
2008
Dec. 31,
2007
(E thousand)
Temporary differences .................................................... 26,255 40,038
Tax losses not yet utilized ................................................. 43,176 42,925
d) Current tax
Tax receivables of A29,388 thousand (2007: A6,572 thousand) were recorded in the balance sheet for expected
tax refunds. The income tax payables comprise liabilities of A1,269 thousand (2007: A323 thousand), if the payment
obligation is nearly certain, and provisions of A17,920 thousand (2007: A17,992 thousand), if uncertainty exists
concerning the amount or the date of payment.
F-145

(14) Earnings per share
2008 2007
Net income attributable to shareholders of Klöckner & Co SE (A thousand) .......... 398,134 133,385
Weighted average number of shares (thousands of shares) ........................ 46,500 46,500
Basic earnings per share (E/share) ........................................ 8.56 2.87
Net income attributable to shareholders of Klöckner & Co SE (A thousand) .......... 398,134 133,385
Interest expense on convertible bond (net of tax) (A thousand) .................... 11,687 4,888
Net income used to determine diluted earnings per share (A thousand) .............. 409,821 138,273
Weighted average number of shares (thousands of shares) ........................ 46,500 46,500
Dilutive potential shares from convertible bond (thousands of shares) ...............
Weighted average number of shares for diluted earnings per share (thousands of
4,025 1,742
shares). ........................................................... 50,525 48,242
Diluted earnings per share (E/share) ...................................... 8.11 2.87
The dilutive, potential shares of the issued convertible bond were included in the calculation of diluted
earnings (see Note (25) Financial liabilities).
Notes to the consolidated balance sheet
(15) Intangible assets, property, plant and equipment and investment property
a) Intangible assets
Licenses, similar
rights and other
intangible assets Software Goodwill
Total
intangible
assets
Cost as of Jan. 1, 2007 ........................... 22,137
(E thousand)
14,145 10,298 46,580
Accumulated amortization and impairments ............ (3,808) (10,543) — (14,351)
As of Jan. 1, 2007. .............................. 18,329 3,602 10,298 32,229
Exchange rate differences ......................... (7,389) (59) (7,299) (14,747)
Changes in the scope of consolidation ................ 104,881 9 88,219 193,109
Additions ..................................... 68 3,358 — 3,426
Disposals. ..................................... — (1) — (1)
Amortization ................................... (14,340) (2,095) — (16,435)
As of Dec. 31, 2007. ............................. 101,549 4,814 91,218 197,581
Cost as of Dec. 31, 2007 .......................... 118,939 16,417 91,218 226,574
Accumulated amortization and impairments ............ (17,390) (11,603) — (28,993)
As of Jan. 1, 2008. .............................. 101,549 4,814 91,218 197,581
Exchange rate differences ......................... 6,558 (6) 2,452 9,004
Changes in the scope of consolidation ................ 38,970 (796) 10,888 49,062
Additions ..................................... 15 4,831 — 4,846
Disposals. ..................................... — (151) — (151)
Amortization ................................... (22,797) (1,614) — (24,411)
Transfers ...................................... (30) 30 — —
As of Dec. 31, 2008. ............................. 124,265 7,108 104,558 235,931
Cost as of Dec. 31, 2008 .......................... 161,024 18,619 104,558 284,201
Accumulated amortization and impairments ............ (36,759) (11,511) — (48,270)
The value of intangible assets was corroborated by the impairment tests performed in the fourth quarter for
each cash generating unit.
Key assumptions used by management in determining the value in use or the fair value less cost to sell
comprise the assessment of expected future gross profit, expected inflations and discount rates. The assumptions are
based both on historical data and expected market developments.
For the reporting period pre-tax discount rates between 10.4% and 12.8% depending on the respective cash
generating unit were used. To monitor potential impairment exposure the Group performs simulations using higher
F-146

discount rates. Based on such simulations even a 10% increase in the respective discount rate will not trigger an
impairment.
b) Property, plant and equipment
Land,
similar land
rights and
buildings
Technical
equipment
and machinery
Other
equipment,
operating
and office
equipment
Construction
in progress
Total
property,
plant and
equipment
Cost as of Jan. 1, 2007. .............
Accumulated depreciation and
658,606 249,335
(E thousand)
213,109 17,725 1,138,775
impairments .................... (290,610) (179,496) (168,121) — (638,227)
As of Jan. 1, 2007. ................ 367,996 69,839 44,988 17,725 500,548
Exchange rate differences. ........... (6,993) (1,999) (1,081) (583) (10,656)
Changes in the scope of consolidation . . 16,198 7,845 5,224 8 29,275
Additions. ....................... 22,378 12,923 12,867 8,782 56,950
Disposals. ....................... (18,329) (343) (539) (75) (19,286)
Depreciation ..................... (19,121) (15,246) (13,056) — (47,423)
Transfers ........................ 6,549 1,945 2,461 (10,955) —
Reclassification to assets held for sale . . (17,482) (7,998) (1,666) (124) (27,270)
As of Dec. 31, 2007. ............... 351,196 66,966 49,198 14,778 482,138
Cost as of Dec. 31, 2007 ............
Accumulated depreciation and
632,174 216,741 209,574 14,778 1,073,267
impairments .................... (280,978) (149,775) (160,376) — (591,129)
As of Jan. 1, 2008. ................ 351,196 66,966 49,198 14,778 482,138
Exchange rate differences. ........... 7,264 (760) 2,252 367 9,123
Changes in the scope of consolidation . . (3,133) 1,076 (1,427) 43 (3,441)
Additions. ....................... 6,939 12,125 12,452 11,414 42,930
Disposals. ....................... (2,971) (515) (1,049) (70) (4,605)
Depreciation ..................... (16,654) (13,694) (12,593) — (42,941)
Transfers ........................ 5,818 7,716 3,604 (17,138) —
Reclassification to assets held for sale . . (3,783) — — — (3,783)
As of Dec. 31, 2008. ............... 344,676 72,914 52,437 9,394 479,421
Cost as of Dec. 31, 2008 ............
Accumulated depreciation and
636,104 225,779 216,873 9,514 1,088,270
impairments .................... (291,428) (152,865) (164,436) (120) (608,849)
Property, plant and equipment with a carrying amount of A120,032 thousand (2007: A175,281 thousand) have
been used as collateral to secure borrowings of the Group.
In 2008 Klöckner & Co recognized no impairment losses (2007: A287 thousand).
Assets held under finance leases
As of the reporting date, the carrying amount of capitalized assets held under finance leases amounts to
A13,363 thousand (2007: A14,221 thousand) for land and buildings, A6,325 thousand (2007: A4,149 thousand) for
technical equipment and machinery, A519 thousand (2007: A306 thousand) for vehicles and A0 thousand
(2007: A2,735 thousand) for assets under construction. Klöckner & Co is party in the following key financing
lease arrangements, the majority of which have purchase options:
In connection with the consolidation of sites in Valencia, Spain, leasing agreements for real estate were
concluded in 2004. Their carrying amount as of December 31, 2008 was A6,104 thousand
(2007: A6,173 thousand).
Also in 2004 real estate lease agreements were concluded for properties in Catalayud, Spain. The carrying
amount of the assets capitalized under the agreements amounts to A921 thousand (2007: A956 thousand).
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A further lease, concluded in 2005, pertains to the Epila site in Spain. The carrying amount of the assets is
A4,389 thousand (2007: A4,502 thousand) as of December 31, 2008.
The carrying amount of the leased assets also includes two buildings in Austria (Vienna and Neumarkt) in
the amount of A1,949 thousand (2007: A2,249 thousand).
c) Investment Property
The Group’s investment property only comprises the Valencia premises. In 2007 the Group did not hold any
investment property.
2008
(E thousand)
Cost
Balance as of January 1 ...................................................... 0
Additions .................................................................. 13,208
Balance as of December 31 .................................................... 13,208
Accumulated depreciation ...................................................... 20
Net book value as of December 31 .............................................. 13,188
In 2008 rental income amounts to A20 thousand (2007: A0 thousand); operating expenses attributable to the
premises amounted to A15 thousand (2007: A0 thousand). The fair value amounts to A13.2 million based on an
external appraisal.
(16) Inventories
Dec. 31,
2008
Dec. 31,
2007
(E thousand)
Raw materials and supplies ............................................. 30,807 25,681
Work in progress .................................................... 7,317 7,501
Finished goods and merchandise ......................................... 948,415 913,249
Advance payments ................................................... 14,073 9,213
Inventories ........................................................ 1,000,612 955,644
Of the inventories recognized as of December 31, 2008, A384,781 thousand (2007: A241,418 thousand) are
stated at net realizable values. Write-downs to the net realizable value amount to A102,453 thousand
(2007: A46,822 thousand).
In addition to customary reservations of title, inventories with a carrying amount of A74,328 thousand
(2007: A41,308 thousand) serve as collateral for financial liabilities of A3,349 thousand (2007: A10,312 thousand).
(17) Trade receivables
Trade receivables are generally invoiced in the local currency of the relevant Group company; in general export
receivables in foreign currencies are hedged.
The Klöckner & Co Group regularly sells trade receivables under two ABS programs. The trade receivables are
sold by the participating Group companies to two special-purpose entities (SPE). As the programs do not qualify for
derecognition under the requirements of IAS 39, the receivables are reported on the Group’s consolidated balance
sheet. The refinancing of the purchased receivables by the SPE is therefore reported in the consolidated financial
statements as loans from the conduits.
The carrying amount of the receivables of the Group companies participating in the ABS programs as of
December 31, 2008 amounts to A605 million (2007: A722 million). For further information to the ABS programs
please see Note (25) Financial liabilities.
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The following table provides information on the extent of credit risks attributable to trade receivables:
Trade Receivables
Of which:
not overdue as of
the balance sheet
date
Of which:
overdue by days as of the balance sheet date
1-30 days 31-60 days 61-90 days 91-120 days � 120 days
(in E thousand)
Write-downs Carrying amount
Dec. 31, 2008
827,664 643,495 128,767 30,274 10,834 7,035 7,259 (29,046) 798,618
Dec. 31, 2007
958,555 779,691 143,036 21,877 5,567 4,284 4,100 (28,591) 929,964
Moreover, trade receivables in the amount of A3,903 thousand (2007: A6,067 thousand) were used as collateral
for bank loans.
(18) Other assets
Dec. 31, 2008 Dec. 31, 2007
Current Non-current Current Non-current
(E thousand)
Reimbursement receivable against former shareholder from
French antitrust case ............................. 70,000 — — —
Receivable from the disposal of premises Valencia ......... — — 31,659 —
Receivables from insurance companies. ................. 6,386 — 2,757 —
Commission claims ................................ 25,435 — 21,174 —
Reinsurance claims from pension funds ................. — 4,429 — 6,139
Prepaid pension cost ............................... — 6,129 — 6,044
Employer contribution reserves, Switzerland ............. — 4,804 — 5,349
Claims for other taxes .............................. 3,259 — 2,732 —
Prepaid expenses .................................. 4,242 428 4,531 140
Fair value of derivative financial instruments ............. 11,878 — 661 —
Other assets ..................................... 20,645 9,755 22,853 2,064
Other assets ..................................... 141,845 25,545 86,367 19,736
Other current assets include deposits of A1,417 thousand (2007: A2,836 thousand) and creditors with debit
balances of A884 thousand (2007: A2,719 thousand). Other non-current assets relate with A5,883 thousand to escrow
receivables from the sale of Namasco Ltd.
(19) Liquid Funds
Cash and cash equivalents predominantly include bank balances. Of these cash balances A3,105 thousand
(2007: A0 thousand) serve as collateral for fair values of derivative financial instruments and are therefore restricted.
(20) Non-current assets held for sale
Non-current assets held for sale include assets no longer used in operations. The amount of A4,044 thousand
(2007: A170 thousand) is attributable to land and buildings of the Europe segment and A739 thousand (2007: A0 thousand)
to land and buildings and A159 thousand (2007: A150 thousand) to machinery, both of the America segment.
(21) Equity and minority interests
a) Issued capital
The subscribed capital of Klöckner & Co SE remains unchanged at A116,250 thousand and consists of
46,500,000 registered shares. In line with the resolution by the Annual General Meeting on June 21, 2006, the
Management Board is authorized to raise share capital by up to A50,000 thousand by issuing additional shares until
June 20, 2011 (authorized capital in line with sections 202 et seqq. of the Aktiengesetz (AktG — German Stock
Corporation Act). The capital increase can be made in cash or as contribution-in-kind with the option to exclude
shareholders’ subscription rights in certain cases.
By resolutions of the Annual General Meetings on June 20, 2007 and June 20, 2008 the Company’s share
capital has been conditionally increased up to A11,625,000 each by the issue of up to each 4,650,000 newly
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egistered non-par-value shares that are entitled to profits from the beginning of the business year in which they are
issued.
The conditional capital serves to grant subscription and/or conversion rights to the holders of option bonds
and/or convertible bonds that are issued by the Company or a Group company in accordance with the authority of
the Annual General Meeting of the Company.
In accordance with sections 21 para. 1, 22 para. 1 Wertpapierhandelsgesetz (WpHG — Securities Trading Act)
the following shares in Klöckner & Co SE were held at the date of authorization of the financial statements:
Notifying institutions Domicile
Voting
interests
in %
Increase over threshold
FIL Investments International ................... Hildenborough, 3.66 b)
United Kingdom
FIL Investment Management Limited ............. Hildenborough, 3.68 b)
United Kingdom
FIL Limited ................................ Hamilton, Bermuda 3.68 b)
Franklin Mutual Series Fund. ................... Short Hills, USA 5.00 a)
Decrease under threshold
Franklin Mutual Advisors, LLC ................. Short Hills, USA 9.89 b)
a) Directly held
b) Attributed holding, not cumulative
Date on which
threshold was met
December 19, 2008
December 19, 2008
December 19, 2008
February 19, 2007
November 21, 2008
A full listing of notifications in accordance with section 21 para. 1 and section 22 para. 1 Wertpapierhandelsgesetz
(WpHG — Securities Trading Act) is attached as appendix to notes to the consolidated financial
statements.
b) Capital reserves
The additional paid-in capital remains unchanged at A260,496 thousand. This includes a premium of A87,750
thousand from the issue of new shares on June 28, 2006, and the equity component of A62,797 thousand attributable
to the conversion feature of the convertible bond issued on July 18, 2007.
c) Retained earnings
Retained earnings include the accumulated undistributed earnings of the companies included in the consolidated
financial statements, to the extent that no distributions are made outside the Group, as well as effects on
equity from consolidation.
Retained earnings are presented net of costs incurred in issuing the new shares and the issuance cost associated
with the convertible bond, net of tax.
d) Accumulated other comprehensive income
Accumulated other comprehensive income comprises of foreign currency translation adjustments resulting
from the translation of the financial statement of foreign subsidiaries and changes in the fair value of cash flow
hedges.
e) Minority interests
Minority interests represent third party interests in consolidated subsidiaries.
The development of the individual components of consolidated equity and minority interests for the period
from January 1, 2008 to December 31, 2008, and from January 1, 2007 to December 31, 2007, is shown in the
statement of changes in equity.
(22) Share-based payments
Under the virtual stock option plan introduced in 2006, 930,000 virtual options were allocated to the
Management Board. The program covers a five-year period in which equal annual tranches of 20% or 186,000
virtual stock options are granted to the Management Board. The strike price for the first tranche has been set to the
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IPO price of A16/share. The strike price for each subsequent tranche is increased by 5% over the previous year’s
strike price, and so will ultimately rise to A19.45/share for the fifth tranche. The individual strike price will be
reduced by the dividend attributable to the allotment period.
In connection with the enlargement of the Management Board, the Board program was increased by 300,000
virtual stock options which will be issued in five annual tranches beginning in business year 2009. The strike price is
based on the non-weighted average closing price of Klöckner & Co shares over the last 30 consecutive trading days
prior to issuance reduced by dividends attributable to the program term.
The virtual stock options of each tranche can be exercised after a 30-day trading period after the Annual
General Meeting following the allotment year of the respective tranche. Subsequently, the options of the relevant
tranches may be exercised in full or in part at any time. The amount to settle the obligation corresponds to the
difference between the average trading price of the last 30 trading days (XETRA trading, Deutsche Börse AG,
Frankfurt a.M.) prior to exercising the option and the respective strike price of the tranche.
In addition 121,500 (2007: 112,000) virtual stock options were granted to certain members of the senior
management throughout the Group during the first half year of 2008. The exercise conditions are largely identical to
the Management Board program with, however, lower maximum payouts for certain members of senior management.
Furthermore, for such individuals the strike price calculation follows the calculation of the extended
Management Board program.
Of the granted virtual stock options a total of 233,000 (2007: 296,000) virtual stock options were exercised,
leaving 934,500 virtual stock options unexercised as of December 31, 2008. As of the reporting date, provisions of
A2,270 thousand (2007: A2,827 thousand) were established. Total expenses recognized during the financial year
amount to A2,864 thousand (2007: A11,716 thousand).
To limit expenses and cash flows for the granted and approved further grants of virtual stock options until and
including financial year 2011 the Group entered into certain derivative financial instruments (i.e. stock options) in
January 2008. The instruments are accounted for at fair value through profit or loss in accordance with IAS 39. The
fair value changes, net of gains on exercise of certain instruments, for these instruments amount to a negative A8,468
thousand (2007: A0 thousand) which have been recorded as personnel expenses. The fair values of such derivative
financial investments are provided in Note (30) Derivative financial investments.
(23) Provisions for pensions and similar obligations
Various types of pension schemes have been established for most employees of the Group, depending on the
legal, economic and tax environment of the respective jurisdictions. Benefits provided are usually based on the
length of service and the employees’ salaries.
Benefits provided comprise of both defined contribution schemes and defined benefit plans.
For defined contribution plans, the Group contributes funds to private or public pension institutions on the
basis of statutory or contractual requirements. With these payments the Group is discharged from all further
obligations. Defined contribution expenses in 2008 amounted to A20,615 thousand (2007: A19,408 thousand).
Included therein are employers’ contributions to the statutory pension schemes in the amount of A16,240 thousand
(2007: A15,697 thousand).
For the most part, the pension schemes are designed as defined benefit plans, either funded or unfunded.
The following actuarial assumptions were used in the actuarial calculations performed by third party actuaries:
Germany
in %
Austria
in %
Switzerland
in %
The Netherlands
in %
UK
in % *)
France
in %
Discount rate ........ 6.00 6.00 3.50 6.00 6.40 6.00 5.89-6.32
Salary trend ......... 3.20 3.20 2.00 2.65 4.30 2.00 3.50
Pension trend ........ 2.25 2.25 0.50 2.00 2.70 1.25 *)
0.00
Expected return on plan
assets ............ 4.50 — 4.50 5.80 7.00-7.40 4.50 7.50
*) Depending on the respective pension scheme
Unchanged to the prior year, the Group uses Prof. Dr. Klaus Heubeck’s 2005 G biometric tables (“Richttafeln”)
to calculate its obligations under German pension schemes. Such tables are widely recognized for use in the
measurement of company pension obligations.
F-151
US
in %

The discount rate assumptions reflect the rates available for high-quality fixed income investments during the
period to maturity of the benefit in the respective obligation. A uniform interest rate was used for the euro zone.
Expected returns on plan assets are calculated according to the allocation of plan assets. For investments in
equity securities, the yield reflects the observable performance in the individual countries and the respective
portfolio. The return on debt securities is derived from quoted prices of such securities. The expected return for real
estate investments depends on the marketability, which is determined by local market conditions and individual
contractual commitments.
The pension obligations of the German Group companies arising from defined benefit plans are largely
unfunded, whereas those of the foreign subsidiaries are predominantly funded. The defined benefit plans are
structured as follows:
Dec. 31,
2008
Dec. 31,
2007
(E thousand)
Defined benefit obligation of unfunded plans ................................ 144,897 147,204
Defined benefit obligation of fully or partly funded defined benefit plans ........... 420,078 411,325
Fair value of plan assets ............................................... (393,515) (464,622)
Unrecognized actuarial gains and losses. ................................... (1,623) 18,383
Unrecognized past service cost .......................................... 2,622 2,924
Amounts not recognized due to asset ceiling (IAS 19.58 (b)) .................... 1,507 67,199
Fair value of the reimbursement rights ..................................... (4,429) (6,139)
Net amount recognized ............................................... 169,537 176,274
Thereof:
— Other assets in connection with pension obligations *)
....................... 10,558 12,183
— Provisions for pensions and similar obligations ............................ 180,095 188,457
*) Also includes reimbursement rights recognized as assets
The reconciliation of the defined benefit obligation is as follows:
2008 2007
(E thousand)
Defined benefit obligation as of January 1 ................................. 558,529 607,487
Service cost. ......................................................... 11,481 12,790
Interest cost. ......................................................... 25,596 22,599
Employee contributions ................................................. 15,785 11,686
Actuarial gains and losses ............................................... (11,090) (50,232)
Exchange rate differences ............................................... 15,403 (17,262)
Benefits paid ......................................................... (30,085) (28,654)
Past service cost ...................................................... (339) (422)
Changes in the scope of consolidation . ..................................... (18,643) 537
Settlements ......................................................... (1,662) —
Defined benefit obligation as of December 31 ............................... 564,975 558,529
F-152

The fair values of the plan assets developed as follows:
2008 2007
(E thousand)
Fair value of plan assets as of January 1. .................................. 464,622 434,395
Expected return ....................................................... 24,010 22,250
Employee contributions ................................................. 15,786 11,686
Employer’s contributions ................................................ 8,673 12,756
Actuarial gains and losses ............................................... (98,108) 20,091
Exchange rate differences ............................................... 19,832 (16,155)
Benefits paid ......................................................... (20,575) (20,707)
Changes in the scope of consolidation . ..................................... (20,725) 306
Fair value of plan assets as of December 31 ................................ 393,515 464,622
The current allocation of plan assets is as follows:
Dec. 31,
2008
Dec. 31,
2007
(E thousand)
Shares .............................................................. 125,931 163,962
Bonds .............................................................. 137,680 171,035
Other assets. ......................................................... 31,478 39,410
Real estate .......................................................... 98,426 90,215
393,515 464,622
In 2008, financial instruments issued by the plan sponsor amounted to A0 thousand (2007: A898 thousand),
own-used real estate and other assets used by the Group amounted to A11,117 thousand (2007: A10,614 thousand).
The changes in reimbursement rights are as follows:
2008 2007
(E thousand)
Reimbursement rights as of January 1 ....................................... 6,139 5,976
Expected return .......................................................... 197 225
Employer’s contributions ................................................... — 246
Actuarial gains and losses .................................................. (54) (194)
Benefits paid ............................................................ (8) (18)
Settlements ............................................................. — (96)
Changes in the scope of consolidation ......................................... (1,845) —
Reimbursement rights as of December 31 ..................................... 4,429 6,139
Reimbursement rights recognized contain life insurance policies and claims arising from other insurance
concluded to cover the relevant pension obligations.
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Pension expenses consist of personnel expenses and interest expenses which are included in interest income,
net:
2008 2007
(E thousand)
Service cost .......................................................... (11,481) (12,790)
Interest cost for funded plans ............................................. (17,564) (15,741)
Expected return on plan assets ............................................ 24,010 22,250
Expected return on reimbursement rights ..................................... 197 225
Actuarial gains and losses ................................................ (68,608) 48,858
Past service cost ....................................................... 640 301
Effects of plan curtailments and settlements. .................................. 1,662 —
Effects of limitation in line with asset ceiling under IAS 19.58 (b) .................. 63,947 (53,599)
Interest cost for unfunded plans. ........................................... (8,032) (6,858)
Total expenses for defined benefit pension obligations ......................... (15,229) (17,354)
The actual loss on plan assets amounted to A74,112 thousand in 2008 (2007: return A42,341 thousand). The
loss is primarily attributable to investments in equity and debt securities due to the general decline of the capital
markets. The actual return on reimbursement rights totaled A3 thousand (2007: A31 thousand).
The funded status of defined benefit plans is as follows:
2008 2007
(E thousand)
2006
Defined benefit obligation ...................................... 564,975 558,529 607,487
Fair value of plan assets ........................................ 393,515 464,622 434,395
Funded status ................................................ 171,460 93,907 173,092
In 2008 and 2007, experience adjustments to the present value of pension rights and the fair values of plan
assets were as follows:
2008 2007
(E thousand)
Defined benefit obligation ................................................ (3,585) 2,428
Fair value of plan assets .................................................. (98,108) 20,022
The employers’ contributions to the plan assets for the 2009 financial year are expected to be
A11,248 thousand.
Pension-related obligations include obligations for compensation payments.
(24) Other provisions
The provisions developed as follows:
As of
January 1,
2008 Addition Accretion Utilization Reversals
Other
changes *)
As of
Dec. 31,
2008
Other taxes ...................
Personnel-related obligations
1,406 648 —
(E thousand)
1,067 32 22 977
— early retirement ............. 8,471 5,491 204 3,487 488 (208) 9,983
— anniversary payments ......... 13,457 71 557 446 93 (702) 12,844
— other ..................... 215 58 — 213 — (1) 59
Onerous contracts .............. 2,915 3,631 — 685 170 176 5,867
Restructuring ................. 5,117 9,241 — 2,635 1,007 — 10,716
KDI antitrust case .............. 20,000 149,300 — — — — 169,300
Litigation and other risks ........ 22,401 2,531 — 2,194 7,422 (87) 15,229
Miscellaneous provisions. ........ 43,112 24,250 (12) 21,133 27,767 (619) 17,831
117,094 195,221 749 31,860 36,979 (1,419) 242,806
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As of
January 1,
2008 Addition Accretion Utilization
(E thousand)
Reversals
Other
changes *)
As of
Dec. 31,
2008
Other accrued liabilities
Personnel-related obligations ...... 53,981 26,293 — 24,888 2,243 (1,274) 51,869
Outstanding invoices ............ 31,292 15,665 — 18,008 828 (2,787) 25,334
Miscellaneous accrued liabilities . . . 1,139 1,222 — 1,036 280 636 1,681
86,412 43,180 — 43,932 3,351 (3,425) 78,884
Other provisions .............. 203,506 238,401 749 75,792 40,330 (4,844) 321,690
*) Change in scope of consolidation, foreign currency adjustments, reclassification and transfer to third parties
Reconciliation to balance sheet amounts:
Dec. 31, 2008 Dec. 31, 2007
Non-current Current Non-current Current
Other taxes ........................................
Personnel-related obligations
—
(in E thousand)
977 — 1,406
— early retirement .................................. 6,665 3,318 7,181 1,290
— anniversary payments .............................. 12,601 243 13,200 257
— other . . ........................................ — 59 — 215
Onerous contracts ................................... 1,087 4,780 1,330 1,585
Restructuring ...................................... — 10,716 303 4,814
KDI antitrust case ................................... — 169,300 20,000 —
Litigation and other risks. ............................. 10,382 4,847 10,744 11,657
Miscellaneous provisions. ............................. 6,189 11,642 6,393 36,719
36,924 205,882 59,151 57,943
Other accrued liabilities
Personnel-related obligations ........................... — 51,869 — 53,981
Outstanding invoices ................................. — 25,334 — 31,292
Miscellaneous accrued liabilities ........................ — 1,681 — 1,139
— 78,884 — 86,412
Other provisions ................................... 36,924 284,766 59,151 144,355
The provision for onerous contracts is based on procurement and sale contracts for goods and other contractual
obligations.
The provisions for restructuring relate to obligations in respect of termination benefits granted in redundancy
programs and other restructuring expenses.
As stated in Note (6) Specific items recognized in net income antitrust penalties of A169,300 thousand were
imposed against the French subsidiary KDI in December 2008. The Group has taken legal action aiming to reduce
the amount to be paid.
The reduction of the provisions for litigation and other risks is largely attributable to the Global Settlement
with the former shareholder Balli.
Miscellaneous provisions include an amount of A2,017 thousand (2007: A2,985 thousand) for compensation
payments to former employees of a subsidiary acquired in 2000 due to the insolvency of the relevant insurance
company. Furthermore, provisions for environmental remediation including decontamination and other risks are
included under this caption.
Accrued liabilities for employee-related obligations include bonus payments of A35,023 thousand
(2007: A36,949 thousand) and accrued vacation and accrued overtime of A15,022 thousand
(2007: A14,987 thousand).
F-155

(25) Financial liabilities
The table provides details of financial liabilities for the dates indicated:
Dec. 31, 2008 Dec. 31, 2007
up to
1 year 1–5 years
over
5 years Total
up to
1 year 1–5 years
over
5 years Total
(E thousand)
Bonds ..................... 2,097 276,162 — 278,259 2,097 264,170 — 266,267
Liabilities due to banks *) .......
Liabilities under the ABS
42,985 317,927 — 360,912 66,267 244,134 — 310,401
programs ................. 524 209,962 — 210,486 1,204 293,609 — 294,813
Finance lease liabilities *) ....... 2,506 7,386 1,563 11,455 3,076 9,675 1,488 14,239
48,112 811,437 1,563 861,112 72,644 811,588 1,488 885,720
*) 2007: Excluding liabilities of Namasco Ltd which are included in liabilities associated with assets held for sale
Financial liabilities of A28,424 thousand (2007: A36,000 thousand) are secured by mortgages. Furthermore,
inventories listed in Note (16) Inventories serve as collateral as well as receivables under the ABS programs.
Transaction costs that are directly attributable to the issue of financial liabilities in the amount of A6,312 thousand
(2007: A10,415 thousand) were offset against the respective obligation.
Bonds
In July 2007, Klöckner & Co SE issued via its wholly owned subsidiary Klöckner & Co Finance International
S.A. convertible bonds with an aggregated nominal value of A325 million. Payments under the bond are guaranteed
by Klöckner & Co SE. The bonds which are convertible into shares of Klöckner & Co SE have a maturity of five
years and a coupon of 1.50%. The conversion price has been set at A80.75. For accounting purposes the bond was
bifurcated into an equity and a liability component. Subsequent accounting of the liability component will be on an
amortized cost basis until conversion or maturity of the bond. The remaining equity component which amounts to
A62.8 million is included in shareholders’ equity within additional paid-in capital with no subsequent adjustment.
Liabilities due to banks
On May 2, 2007, Klöckner & Co signed an agreement for a multi-currency revolving credit facility with a total
volume of A600 million of which A295 million (2007: A201 million) was utilized as of December 31, 2008. The
credit facility has a term of 3 years, with two options allowing an extension up to 5 years.
Further liabilities due to banks exclusively comprise of bilateral borrowings of international subsidiaries,
which are primarily used to finance working capital.
Liabilities under ABS programs
Since July 2005, the Klöckner & Co Group has conducted a European ABS program with a term of five years.
The European program has a volume of A420 million. In addition, the existing ABS program in the US was
terminated in 2007 and replaced by a new program with a volume of USD 125 million (A90 million).
As of the balance sheet date, utilization of the programs of A213 million including interest breaks down as
follows:
Dec. 31, Dec. 31,
2008 2007
(E million)
European program
— Utilization .......................................................... 125 224
— Maximum volume . . . ................................................. 420 420
American program
— Utilization .......................................................... 88 75
— Maximum volume . . . ................................................. 90 85
The utilization of the programs is recognized as loans given that the requirements for derecognition under
IAS 39 of the receivables transferred were not met.
F-156

Liabilities under finance leases
Liabilities from finance leases are carried at the present value of future lease payments which have the
following terms:
Dec. 31,
2008
Dec. 31,
2007
(E thousand)
Due within one year ..................................................... 3,086 3,265
Due between one and five years ............................................ 8,506 10,783
Due after five years. ..................................................... 1,636 1,768
Future minimum lease payments .......................................... 13,228 15,816
Due within one year ..................................................... 580 189
Due between one and five years ............................................ 1,120 1,108
Due after five years. ..................................................... 73 280
Interest included in future minimum lease payments ........................... 1,773 1,577
Due within one year ..................................................... 2,506 3,076
Due between one and five years ............................................ 7,386 9,675
Due after five years. ..................................................... 1,563 1,488
Present value of future minimum lease payments .............................. 11,455 14,239
(26) Trade payables
Dec. 31,
2008
Dec. 31,
2007
Advance payments received ..............................................
(E thousand)
125 392
Trade payables ....................................................... 360,838 565,223
Bills payable ......................................................... 31,220 44,248
Trade payables. ...................................................... 392,183 609,863
(27) Other liabilities
Dec. 31, 2008 Dec. 31, 2007
Non-current Current Non-current Current
Liabilities due to entities in which participations are held. .... —
(E thousand)
37 — 109
Social security contributions .......................... — 10,857 — 9,880
Customers with credit balances ........................ — 14,770 — 13,063
Liabilities to employees ............................. — 6,600 — 6,294
Value-added tax liabilities ............................ — 19,688 — 32,223
Other tax liabilities ................................. — 16,570 — 8,244
Contingent consideration for business combinations ......... 3,874 — 5,675 —
Negative fair values of derivative financial instruments ...... 53,716 2,181 1,277 1,274
Other liabilities .................................... 2,044 10,937 2,010 20,661
Other liabilities ................................... 59,634 81,640 8,962 91,748
Negative fair values of derivative financial instruments of A44,665 thousand (2007: A858 thousand) are
attributable to cross currency swaps and interest rate swaps designated as cash flow hedges for which fair value
changes are directly recognized in equity and thus do not effect net income.
Other information
(28) Information on capital management
The Group determines the amount of its capital in relation to risk. The capital structure is managed and, if
necessary, adjusted in line with changes in the economic environment. Options for maintaining or adjusting the
F-157

capital structure include adjusting dividend payments, capital repayments to shareholders, issuing new shares and
the sale of assets to reduce liabilities.
The capital management is based on gearing. Gearing is calculated as the ratio of net cash indebtedness to
equity as stated in the balance sheet. Net cash indebtedness is calculated as the difference between financial
liabilities (adjusted for transaction costs) and cash and cash equivalents reported on the balance sheet. The Group’s
target is to maintain a gearing below 75% (2007: 150%) in order to be able to obtain finance at reasonable
conditions.
Gearing is calculated as follows:
Dec. 31, 2008 Dec. 31, 2007
(E thousand)
Change
Financial liabilities ...................................... 861,112 893,071 (31,959)
Transaction costs. ....................................... 6,312 10,415 (4,103)
Liquid funds ........................................... (296,636) (157,077) (139,559)
Net financial debt (before transaction costs) .................. 570,788 746,409 (175,621)
Equity ............................................... 1,074,410 844,924 229,486
Gearing .............................................. 53% 88%
2007: includes amounts for Namasco Ltd. which are included in assets held for sale and liabilities associated
with assets held for sale, respectively.
The improvement of the gearing ratio results primarily from the proceeds received from the sale of KVT.
The Group’s mid term goal is to achieve investment grade rating.
(29) Additional information for financial instruments
The carrying amounts and fair values by category of financial instruments are as follows:
Financial assets as of December 31, 2008 Fair value
IAS 39 measurement categories
At fair
value through Available Loans and
profit or loss for sale receivables
(E thousand)
Not covered
by the scope
of IFRS 7
Total
carrying
amount as of
Dec. 31, 2008
Non-current financial assets
Financial assets ............. 789 — 410 379 1,575 2,364
Other assets ................
Current financial assets
9,946 1,446 — 8,500 15,599 25,545
Trade receivables ............ 798,618 — — 798,618 — 798,618
Other assets ................ 137,326 12,484 — 124,842 4,519 141,845
Liquid funds ............... 296,636 — 105 296,531 — 296,636
Assets held for sale .......... — — — — 4,942 4,942
1,243,315 13,930 515 1,228,870 26,635 1,269,950
Financial liabilities as of
December 31, 2008 Fair value
IAS 39 measurement
categories
At fair
value through Other
profit or loss liabilities
Carrying
amount
under IAS 17
(E thousand)
Not covered
by the scope
of IFRS 7
Total
carrying
amount as of
Dec. 31, 2008
Non-current financial liabilities
Financial liabilities ........ 733,762 — 804,050 8,950 — 813,000
Other liabilities ...........
Current liabilities
59,619 9,051 50,568 — 15 59,634
Financial liabilities ........ 48,113 — 45,605 2,507 — 48,112
Trade payables ........... 392,183 — 392,183 — — 392,183
Other liabilities ...........
Liabilities associated with
34,524 2,383 32,142 — 47,115 81,640
assets held for sale ...... — — — — — —
1,268,201 11,434 1,324,548 11,457 47,130 1,394,569
F-158

Financial assets as of December 31, 2007 Fair value
IAS 39 measurement categories
At fair
value through Available Loans and
profit or loss for sale receivables
(E thousand)
Not covered
by the scope
of IFRS 7
Total
carrying
amount as of
Dec. 31, 2007
Non-current financial assets
Financial assets ............. 1,070 — 586 484 1,591 2,661
Other assets ................
Current financial assets
1,814 — — 1,814 17,922 19,736
Trade receivables ............ 929,964 — — 929,964 — 929,964
Other assets ................ 82,836 661 — 82,175 3,531 86,367
Liquid funds ............... 153,558 — 122 153,436 — 153,558
Assets held for sale .......... 28,199 — — 28,199 70,397 98,596
1,197,441 661 708 1,196,072 93,441 1,290,882
Financial liabilities as of
December 31, 2007 Fair value
IAS 39 measurement
categories
At fair
value through Other
profit or loss liabilities
Carrying
amount
under IAS 17
(E thousand)
Not covered
by the scope
of IFRS 7
Total
carrying
amount as of
Dec. 31, 2007
Non-current financial liabilities
Financial liabilities ........ 811,712 — 801,913 11,163 — 813,076
Other liabilities ...........
Current liabilities
8,962 — 8,962 — — 8,962
Financial liabilities ........ 73,087 — 69,568 3,076 — 72,644
Trade payables ........... 609,863 — 609,863 — — 609,863
Other liabilities ...........
Liabilities associated with
41,079 1,274 39,805 — 50,669 91,748
assets held for sale ...... 27,284 — 27,284 — 5,010 32,294
1,571,987 1,274 1,557,395 14,239 55,679 1,628,587
Fair values
The fair values of current financial assets are largely identical to their carrying amounts. The fair values of
financial liabilities reflect the current market environment as of December 31, 2008 for the respective financial
instruments. The fair value is not reduced by transaction costs. For current financial liabilities for which no
transaction costs are to be considered, the carrying amount approximates fair value.
Net income by measurement categories
Cash and cash equivalents, trade receivables and other receivables predominantly are of short term maturity.
Therefore, the carrying amounts at the reporting date closely approximate fair values.
Net income for the measurement category loans and receivables consists of foreign currency exchange gains
and losses, impairments and write-offs, recoveries on impaired receivables and compensation by and fees for credit
insurance. In financial year 2008, a net loss of A16,489 thousand (2007: A11,895 thousand) was incurred.
Net income for other liabilities consists of foreign currency exchange gains and losses (2007: plus early
repayment charges and redemption costs and reversed transaction costs of the high yield bond). In financial year
2008, a net loss of A418 thousand (2007: A37,914 thousand) was incurred.
As a result of impairments of non-current securities there were no impairment losses in 2008 for financial
assets (2007: A15 thousand). The impairment loss for trade receivables amounted to A8,504 thousand
(2007: A3,118 thousand).
Credit risks
The Group’s exposure to credit risks mainly arises from its operating business. A credit risk is defined as an
unexpected loss on financial assets, e.g. if a customer is unable to meet its obligations within the appropriate period.
F-159

Throughout the operating businesses, receivables are locally monitored on an ongoing basis. Valuation allowances
are recorded to reflect credit risks.
The maximum exposure to credit risk is reflected by the carrying amounts of the financial assets reported in the
balance sheet. The Group counters the credit risk with its own credit management and with credit insurance. In 2008
approximately 70% of the trade receivables were covered by credit insurance.
(30) Derivative financial instruments
Derivative financial instruments are accounted for at fair value in compliance with IAS 39.
In operating its business the Group is exposed to interest and currency risks. Such risks are hedged using
derivative financial instruments.
The Group only uses standard instruments for which sufficient liquid markets exist. Derivative financial
instruments are entered into and managed in compliance with internal directives that govern the scope of action,
responsibilities and control systems. According to these directives, the use of derivative financial instruments is a
key task of the central finance department of Klöckner & Co SE, which manages and coordinates such use. The
transactions are concluded exclusively with counterparts with first-class credit ratings. Derivative financial
instruments cannot be used for speculative purposes, but exclusively for hedging risks associated with underlying
transactions.
IFRS 7 requires an entity to provide disclosure that enables users of financial statements to evaluate the nature
and the extent of risks arising from financial investments. These risks encompass among others credit risk, market
risk and liquidity risk.
Information with regard to credit risk is provided in Note (29) Additional information for financial
instruments.
Information on interest rate risk
The Group is exposed to changes in interest rate levels primarily resulting from variable interest rates bearing
financial liabilities.
The exposure is predominately arising in the euro zone and the United States. The central finance department
monitors and controls the exposure by using interest rate hedging instruments.
Under the central financial regime funding requirements in the euro zone resulting from acquisitions were
refinanced by the issuance of a convertible bond and revolving credit facilities. The variable interest rates on the
non-current portion of such obligations were for a fixed period of up to seven years in part fixed via interest rate
swaps. Due to their term and volume these instruments qualify as cash flow hedges.
Changes in interest levels will have an impact on the reserve for fair value adjustments of financial instruments
included in equity, and are therefore separately recognized in the sensitivity analysis.
Under consideration of the convertible bond and the fixed rate bilateral credit arrangements as of December 31,
2008, approximately 54% of the net financial indebtedness before transaction costs was of a fixed rate nature. If
hedging instruments are incorporated in the analysis, the amount of a fixed interest debt included in the net cash
indebtedness before transaction costs amounts to approximately 94%.
Under IFRS 7 interest rate risk is assessed using sensitivity analyses in which the impact of interest rate
changes on interest income or expenses and equity as of the balance sheet date is assessed. Interest rate risk is
measured as cash flow risk.
The Group assesses equity and income statement effects under parallel shifting of the euro and US dollar yield
curves. The cash flow impact from the parallel shifting is only assessed with regard to interest income and interest
expenses in the following reporting period.
If US dollar/euro interest rate levels as of December 31, 2008, had been higher by 100 basis points the financial
result for the following year would have been impacted negatively by A1.3 million, representing approximately 2%
of the Group’s financial result.
At a US dollar/euro interest rate increase of 100 basis points the value of derivative financial instruments
designated as cash flow hedges would have been positively increased by A10.4 million, which would have been
reflected in equity in the reserve for fair value adjustments of financial instruments.
F-160

Information on foreign currency exchange risk
The Group is exposed to foreign currency exchange risk resulting from financing activity, Group internal
dividend payments and acquisitions of subsidiaries as well as from operating activity. The Group’s hedging policy is
focused on cash-flow-related exposure. Solely translation-related risks, which result from the conversion of assets
and liabilities, are not hedged.
The Group operates a central foreign currency exchange management. Foreign and domestic subsidiaries are
required to identify foreign currency exposure and to communicate the exposure to the central finance department,
or within certain thresholds, hedge the exposure with financial institutions. The hedging transactions cover the
exposure from actual and forecasted transactions.
As of the balance sheet date no material foreign currency exchange risks from the operating business or
acquisitions were identified.
Financing activity foreign exchange risk is the risk that results from foreign currency loans of the holding
companies. As part of the central Group financing these loans denominated in pounds sterling and US dollars were
granted to subsidiaries and were fully hedged. In addition scheduled dividend payments for the first quarter of 2009
from the Swiss subsidiary Debrunner Koenig Holding AG were hedged using currency swaps.
Due to the volume and long-term nature of the US dollar financing both the principal and the interest payments
were hedged using a cross currency swap, designated as cash flow hedge.
Loans granted in pounds sterling were hedged including interest payments via forward contracts and foreign
currency swaps.
The impact of changes of foreign currency rate changes on foreign exchange gains and losses as well as on the
Group’s equity as of the balance sheet date is monitored by a sensitivity analysis. The exposure is assessed as cash
flow risk for the following year.
The sensitivity analysis identifies compensating income effects of forward exchange contracts and swaps,
since their maturity is consistent to the maturity of the underlying financial instrument.
Cross currency swaps designated as cash flow hedge can result in changes in the reserves for fair values of
financial instruments included in equity. Increases or decreases in the US dollar to euro exchange rate would, if
assessed in isolation, lead to changes of such reserves. However, compensating changes in the value of the
underlying transaction would also be recorded in equity, because the underlying transaction is a net investment in a
foreign entity.
Information on liquidity risk
To ensure appropriate levels of liquidity the demand of liquidity is constantly monitored by the Group’s central
finance department. The Group maintains appropriate lines of credit and cash and cash equivalents at any time to
cover the obligations for a defined period of time.
Including the convertible bond with a nominal amount of A325 million and finance leases of approximately
A11 million the Group has lines of credit of approximately A1.8 billion, of which as of December 31, 2008,
A862 million or 47% were used. This amount includes A252 million collateralized debt, mainly in connection with
the ABS programs.
To hedge for market price risks resulting from the Group’s virtual stock option program of the Management
Board and certain other executives Klöckner & Co entered into option arrangements with a bank. These instruments
are classified as a separate category of derivate financial instruments. The fair value of such options correlates to the
share price of Klöckner & Co SE.
F-161

The following table illustrates the contractual undiscounted interest and principal payments of the nonderivative
and derivative financial instruments for the periods indicated:
December 31, 2008
Cash outflows
less than
1 year 1-5 years
more than
5 years Total
Corporate bond ..................... Capital —
(E thousand)
325,000 — 325,000
Interest 4,875 14,625 — 19,500
Total 4,875 339,625 — 344,500
Bank loans ........................ Capital 42,985 319,737 — 362,722
Interest 10,929 19,171 — 30,100
Total 53,914 338,908 — 392,822
ABS............................. Capital — 212,372 — 212,372
Interest 8,222 9,520 — 17,742
Total 8,222 221,892 — 230,114
Finance lease ....................... Capital 2,506 7,386 1,563 11,455
Interest 580 1,120 73 1,773
Total 3,086 8,506 1,636 13,228
Total financial liabilities .............................. 70,097 908,931 1,636 980,664
Cash outflows from derivative financial instruments designated in
hedging relationships . .............................. 6,713 10,084 786 17,583
December 31, 2007
Cash outflows
less than
1 year 1-5 years
more than
5 years Total
(E thousand)
Corporate bond ..................... Capital — 325,000 — 325,000
Interest 4,875 19,500 — 24,375
Total 4,875 344,500 — 349,375
Bank loans *) ....................... Capital 66,267 246,765 — 313,032
Interest 13,661 17,836 — 31,497
Total 79,928 264,601 — 344,529
ABS............................. Capital — 297,450 — 297,450
Interest 18,464 25,949 — 44,413
Total 18,464 323,399 — 341,863
Finance lease *) ...................... Capital 3,519 10,430 1,558 15,507
Interest 189 1,108 280 1,577
Total 3,708 11,538 1,838 17,084
Total financial liabilities ............................ 106,975 944,038 1,838 1,052,851
Cash inflows (-) from derivative financial instruments
designated in hedging relationships ................... (686) (3,498) (602) (4,786)
*) Excluding liabilities of Namasco Ltd., which are included in liabilities associated with assets held for sale.
Included are financial instruments for which payments have already been fixed as of the balance sheet date;
expected payments on future obligations not yet incurred have not been included. Variable interest payments on
financial instruments were determined on the interest rate fixed as of the balance sheet date. For the use of the
revolving credit facility it was assumed that the level of drawings will be maintained until expiration of the facility.
F-162

The nominal and fair values of the derivative financial instruments used to hedge interest and foreign exchange
exposures are as follows:
Dec. 31, 2008 Dec. 31, 2007
Not designated in
hedge accounting
Designated in
hedge accounting
Not designated in
hedge accounting
Designated in
hedge accounting
(E million)
Nominal values
Forward exchange transactions ...... 280.6 — 52.2 —
Interest rate swaps ............... — 831.1 6.8 640.0
Other interest rate hedging
instruments ................... 35.9 — 34.0 —
Cross currency swap .............. — 223.7 — 160.0
Fair values
Forward exchange transactions ...... 11.9 — 0.6 —
Interest rate swaps ............... — (12.9) (0.1) 0.3
Other interest rate hedging
instruments ................... (2.8) — (1.1) —
Cross currency swap .............. — (31.8) — (1.2)
The nominal values correspond to the gross amounts of the currency and interest rate portfolio.
837,000 (2007: 0) options are used to hedge the exposure resulting from the Group’s virtual stock option
programs. The fair values of these instruments amount to �A6.6 million (2007: A0 million).
The fair values of the derivative financial instruments are determined on the basis of banks’ quoted market
prices or on financial formulae based on models commonly used by banks. If fair values exist they correspond to the
amount third parties would pay for the rights or obligations arising from the financial instruments. The fair values
are the market values of the derivative financial instruments, irrespective of any offsetting changes in value in the
underlying transactions.
Forward exchange transactions with a nominal amount of A280.6 million (2007: A52.2 million) have a
remaining term of less than one year. To hedge its foreign currency exposure of long-term intragroup financing
Klöckner & Co Verwaltung GmbH entered into cross currency swaps maturing in May 2013 and December 2014,
respectively. With regard to the financing volume of US dollar 335 million the principal swap at the beginning and
the end of the term as well as for the semi-annual or quarterly US dollar payments the exchange rate was fixed at the
inception of the swap agreement. Due to its duration and volume the cross currency swap qualifies as cash flow
hedge under IAS 39.
The interest rate swaps designated in a hedging relationship relate to forward interest rate swaps and interest
rate swaps with volumes of A223.6 million each and a weighted fixed swap interest rate between 4.4% and 4.5%.
The total term of these transactions covers a period of up to seven years. The interest rate swaps are used to hedge
existing and future variable euro interest rate debt of the holding companies which relate to refinancing of noncurrent
assets.
The other interest rate hedging instruments with a nominal amount of A35.9 million (2007: A34 million) refer
to a US dollar interest collar of Klöckner & Co Verwaltung GmbH with a floor of 3.75% and a cap of 5.80%. The
US dollar interest collar is used to hedge variable-interest-bearing US dollar loans to Namasco Corporation.
(31) Contingent liabilities
The liabilities on bills amount to A67 thousand (2007: A159 thousand). In addition the Group has issued
guarantees in connection with the disposal of subsidiaries. Such guarantees cover customary representations and
warranties as well as environmental and tax contingencies.
In the Klöckner & Co Group, there are other financial obligations arising in particular from agreements that
qualify as non-cancelable operating leases. Operating leases mainly relate to real estate, machinery, vehicles,
telephone systems and computer hardware. In some instances the leases include purchase options.
In addition during financial year 2007 two premises of a German branch were derecognized in a sale and
leaseback transaction which qualifies as operating lease. The leaseback term is 15 years.
F-163

The future payments to be made under these leases are as follows:
Dec. 31, 2008 Dec. 31, 2007
(E thousand)
Due within one year .............................................. 45,199 35,664
Due between one and five years ...................................... 104,609 91,419
Due after five years ............................................... 63,039 65,832
Future minimum lease payments (nominal amounts) .................... 212,847 192,915
There are also other financial obligations arising from the purchase obligation for investments, which
amounted to A2,098 thousand as of December 31, 2008 (2007: A12,604 thousand).
(32) Related party transactions
Within the framework of its ordinary business activities, the Klöckner & Co Group has business relationships
with numerous companies. These also include related parties that were accounted for at cost. Business relations
with these companies do not fundamentally differ from trade relationships with other companies. No material
transactions were conducted with any of these companies in the year under review.
The compensation model and compensation of the Management and Supervisory Boards is presented in the
compensation report, which is included in the management report. In the reporting year, the members of the
Management Board of Klöckner & Co SE received the following compensation:
2008 2007
(E thousand)
Short-term benefits
— fixed components ....................................................... 1,487 871
— variable components ..................................................... 930 2,089
Share-based compensation. .................................................. 2,072 2,800
The amount for share-based compensation represents the fair value of the virtual stock options at the grant
date. During financial year 2008 payouts for share-based compensation amounted to A2,773 thousand
(2007: A7,591 thousand).
The additions to the statutory pension provisions for the Management Board amounted to A828 thousand
(2007: A112 thousand).
Business with members of the Management Board is restricted to their above function as members of the
Management Board.
Due to the resolution of the Annual General Meeting on June 7, 2006, individual disclosure of the Management
Board compensation is omitted.
In the 2008 financial year, remuneration paid to the Supervisory Board of the Group amounted to A708 thousand
(2007: A401 thousand).
A list of the members of the Management Board and the Supervisory Board is included on pages 8 and 9 of this
annual report.
Related party in accordance with IAS 24 is further the pension fund of the Debrunner & Acifer group,
Switzerland. The pension fund leases premises to the Swiss subsidiaries. Rental expenses for 2008 amount to
A903 thousand (2007: A741 thousand).
(33) Supplemental cash flow information
The cash flow statement is presented in line with IAS 7 (Cash Flow Statement). The cash flow statement is of
central importance in assessing the financial position of the Klöckner & Co Group.
The changes in balance sheet items that provide the basis for the cash flow statement cannot be directly
reconciled to the balance sheet due to the effects of currency translation and changes in the scope of consolidation
which are eliminated in compiling the cash flow statement.
F-164

Cash flow from operating activities
Cash flow from operating activities amounted to A186.9 million in the financial year 2008 (2007: A108.5 million).
Despite the negatively impacted income and financial situation for the multi metal distribution in the fourth
quarter the operating cash flow before changes in balance sheet items and income tax payments increased to
A386.2 million, which is considerably higher than the prior year’s amount of A327.8 million. The increase in
working capital was limited by a continuously stringent trade receivable collection and inventory management. Net
of foreign currency exchange effects, changes in the scope of consolidation and reclassifications to assets held for
sale, working capital increased by A86.7 million to A1,407 million.
Changes 2008/2007 2007/2006
(E thousand)
Inventories ........................................................ +6,444 +70,783
Trade receivables *)
.................................................. (143,449) (29,176)
Trade payables ..................................................... +223,699 +63,584
Net working capital .................................................. +86,694 +105,191
*) Including sold receivables under the ABS programs
The substantial increase in working capital was again fully covered by the operating cash flow, i.e. without
additional loans.
Cash flow from investing activities
Net cash inflow from investments and disinvestments was A72.1 million in 2008. Cash received from
divestments of A387.7 million primarily related to disposal of KVT and Namasco Ltd.
Cash outflows for investing activities, excluding acquisition of subsidiaries relate mainly to modernizing and
expanding existing facilities (A48.1 million). Cash outflows for the acquisition of subsidiaries primarily relate to the
acquisitions outlined in Note (5) Acquisitions and disposals for which, including the acquisition of further stakes in
Debrunner Koenig Holding AG, A266.5 million were paid, net of cash and cash equivalents acquired of A2.1 million.
Cash flow from financing activities
Proceeds from disposal activities were among other things used to reduce the Group’s net financial debt.
Overall, the net outflow from financing activities amounted to A123.4 million (2007: cash inflow A294.8 million).
The business activities of the Klöckner & Co Group continuously generate short-term cash and cash
equivalents. As a general rule they are used within one month to repay working capital credits.
Liquid funds
Liquid funds comprise cash and cash equivalents including short-term securities amounting to A293.5 million
as of December 31, 2008. Cash and cash equivalents include bank balances of A43,392 thousand
(2007: A47,064 thousand) relating to the consolidated special-purpose entities whose business is conducted
exclusively for the subsidiaries participating in the ABS programs.
F-165

(34) Segment reporting
Europe North America Headquarters Consolidation Total
2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
(E thousand)
External sales . . . .....
— of which with third
5,373,659 5,197,178 1,375,936 1,076,965 44,623 26,419 (44,623) (26,419) 6,749,595 6,274,143
parties . ..........
— of which with other
5,373,659 5,197,178 1,375,936 1,076,965 — — — — 6,749,595 6,274,143
segments .........
Investments in intangible
assets/property, plant
— — — — 44,623 26,419 (44,623) (26,419) — —
and equipment . .....
Segment earnings
55,449 50,426 3,566 9,240 1,969 710 — — 60,984 60,376
(EBITDA) ........
Earnings before interest
376,681 326,167 148,624 64,500 75,076 (20,003) — — 600,381 370,664
and taxes (EBIT) ....
Amortization on
intangible assets and
depreciation of
property, plant and
335,954 286,272 126,685 48,011 70,370 (27,477) — — 533,009 306,806
equipment . . . .....
Impairment losses for
intangible assets and
property, plant and
40,727 39,608 21,939 16,489 4,706 7,474 — — 67,372 63,571
equipment . . . .....
Other non-cash income/
— 287 — — — — — — — 287
expenses ......... (166,316) 3,375 — — 103,129 — — — (63,187) 3,375
Europe North America Headquarters Consolidation Total
Dec. 31,
2008
Dec. 31,
2007
Dec. 31,
2008
Dec. 31,
2007
Dec. 31,
2008
Dec. 31,
2007
Dec. 31,
2008
Dec. 31,
2007
Dec. 31,
2008
Dec. 31,
2007
(E thousand)
Segment assets . ..... 2,015,557 2,225,566 562,102 499,319 690,900 527,365 (568,047) (481,637) 2,700,512 2,770,613
Unallocated assets .... — — — — — — — — 374,469 195,540
Total assets ......... — — — — — — — — 3,074,981 2,966,153
Segment liabilities .... 728,978 745,131 57,993 111,824 636,224 571,069 (568,047) (481,637) 855,148 946,387
Unallocated liabilities . . — — — — — — — — 1,145,423 1,174,842
Total liabilities . ..... — — — — — — — — 2,000,571 2,121,229
Dec. 31,
2008
Europe North America Headquarters Total
Dec. 31,
2007
Dec. 31,
2008
Dec. 31,
2007
Dec. 31,
2008
Dec. 31,
2007
Dec. 31,
2008
Dec. 31,
2007
Employees at year-end. ................... 8,696 8,799 1,409 1,628 177 154 10,282 10,581
The multi metal distribution business is classified from a geographical perspective. The markets in Europe and
North America are both largely similar with regard to their economic environment, suppliers and currency
developments. As such segment reporting is provided for these regions. They include all companies domiciled in
the two regions. In addition, all of the central functions that cannot be assigned to a segment, as well as
consolidation effects, are shown in a separate column.
The segments use the same accounting policies as described in Note (4) Significant accounting policies except
for effects of intersegment investments (e.g. profit distributions), which are eliminated within the individual
segments.
The external sales comprise all sales generated with third-party customers. Sales between segments are
disclosed separately to allow reconciliation to consolidated sales. Intersegment sales are invoiced at arms’ length.
These are deliveries by the central purchasing company Klöckner Global Sourcing GmbH, Duisburg. EBITDA is
defined as earnings before interest, taxes, depreciation and amortization and reversals of impairments of intangible
assets and property, plant and equipment.
The segment assets and liabilities contain assets and liabilities that contributed to generating segment earnings.
Receivables and liabilities and income and expenses between the segments are eliminated in consolidation.
The other non-cash income and expenses are explained in Note (6) Specific items recognized in net income.
F-166

(35) Subsequent Events
Faced with a continuing strong drop in demand, the Management Board has approved a further package of
measures to lower costs and inventories. In a program that builds on the initial measures taken last October,
personnel-related actions will be increased again, operating expenses will be reduced in all areas, and inventories
will be decreased further. After initiated job cuttings of 800 employees as part of the initial package of measures, the
workforce is expected to be reduced by an additional 700 employees in a decision that will significantly lower fixed
costs.
(36) Fees and services of the auditor of the consolidated financial statements
The following fees were incurred for services performed by the auditor KPMG Hartkopf + Rentrop Treuhand
KG, Wirtschaftsprüfungsgesellschaft, Cologne and affiliated companies in the financial year:
2008 2007
(E thousand)
Audit of financial statements ................................................. 1,864 1,274
Other assurance or valuation services .......................................... 338 355
Tax advisory services ...................................................... 63 432
Other services. ........................................................... 516 804
2,781 2,865
The fees for auditing primarily include the audit of the consolidated financial statements in line with IFRS and
audits of the stand-alone financial statements of the companies included in the consolidated financial statements.
Other assurance services include review reports on interim financial statements.
The increased fees for audit services rendered as compared to the prior year are due to extended scope of
reportable audit firms. KPMG LLP (UK), KPMG Switzerland and KPMG Spain (both with effect of October 1,
2008) are now affiliated companies to KPMG Hartkopf + Rentrop Treuhand KG.
The fees for tax advisory services relate to advice on individual matters and consulting on other national and
international tax issues.
The fees for other services relate mainly to project-related consulting services.
(37) Application of Sec. 264, Para. 3 of the German Commercial Code
In 2008 the following domestic subsidiaries made use in part of the exemption clause included in section 264
para. 3 of the German Commercial Code (HGB):
Multi Metal Beteiligungs GmbH, Duisburg
Klöckner & Co International GmbH, Duisburg
Klöckner & Co Verwaltung GmbH, Duisburg
Kloeckner & Co USA Beteiligungs GmbH, Duisburg
Klöckner Stahl- und Metallhandel GmbH, Duisburg
Klöckner Global Sourcing GmbH, Duisburg
F-167

(38) Declaration of compliance with the German Corporate Governance Code in accordance with section
161 AktG
On December 15, 2008 the Management Board and Supervisory Board issued the declaration of compliance in
accordance with section 161 AktG (German Stock Corporation Act) and made it permanently available to the
shareholders on the Klöckner & Co Web site.
Duisburg, March 3, 2009
Klöckner & Co SE
The Management Board
Dr. Thomas Ludwig Ulrich Becker Gisbert Rühl
F-168

Curr.
no. Company
Annex to the notes to the financial statements and notes to the consolidated statements of
Klöckner & Co SE
Subsidiary listing according to sections 285 No 11 / 313 para. 2
German Commercial Code (HGB)
Participationpercentage
Held by
current
no.
Currency
Equity in local
currency
Net income
local currency
Sales in local
currency
1 Klöckner & Co Societas Europaea, Duisburg, Germany
I. Consolidated affiliated companies
2 Klöckner & Co Finance International S.A.,
Luxembourg . ......................... 100.00 1 EUR 149,657.61 116,310.67 —
3 Multi Metal Beteiligungs GmbH, Duisburg,
Germany............................. 100.00 1 EUR 257,932,945.30 — 1)
—
4 Klöckner & Co International GmbH, Duisburg,
Germany........................... 100.00 3 EUR 357,899,443.92 — 1)
—
5 Klöckner & Co Verwaltung GmbH, Duisburg,
Germany.......................... 100.00 4 EUR 257,862,067.19 — 1)
—
6 Klöckner & Co Beteiligungs GmbH, Duisburg,
Germany........................ 100.00 5 EUR 459,804,920.91 427,366,663.29 —
7 Debrunner Koenig Holding AG, St. Gallen,
Switzerland . .................... 100.00 6 CHF 214,436,082.50 595,642,627.46 —
8 Davum Construction S.A., Crissier,
Switzerland ................... 100.00 7 CHF 4,470,890.08 697,150.75 29,000,208.74
9 Debrunner Acifer AG, St. Gallen,
Switzerland ................... 100.00 7 CHF 107,031,815.48 25,774,478.05 778,058,175.01
10 Debrunner Acifer AG Landquart,
Landquart, Switzerland. . .......... 100.00 7 CHF 11,234,065.53 5,780,483.72 87,666,312.36
11 Debrunner Acifer AG Wallis, Visp,
Switzerland ................... 100.00 7 CHF 12,079,437.43 3,841,045.44 64,858,143.72
12 Debrunner Acifer S.A. Giubiasco,
Giubiasco, Switzerland . . .......... 100.00 7 CHF 6,621,065.16 1,535,591.48 46,647,061.74
13 Debrunner Acifer S.A. Romandie, Crissier,
Switzerland ................... 100.00 7 CHF 22,880,623.92 6,963,543.97 185,127,360.47
14 Debrunner Koenig Management AG,
St. Gallen, Switzerland . . .......... 100.00 7 CHF 2,877,776.58 829,151.67 —
15 Klöckner Stahl AG, St. Gallen,
Switzerland ................... 100.00 7 CHF 108,161.19 2,040.63 —
16 Koenig Feinstahl AG, Dietikon,
Switzerland ................... 100.00 7 CHF 25,468,828.92 6,377,093.77 112,183,563.78
17 Molok (Valais) S.A., Siders,
Switzerland . . ............... 100.00 11 CHF 374,953.56 1,564.90 —
18 Metall Service Menziken AG, Menziken,
Switzerland ................... 100.00 7 CHF 9,274,404.62 324,881.04 110,213,513.76
19 Klockner Limited, i. L., Douglas, Isle of
Man, United Kingdom. ............. 99.95 6 GBP 2,177.00 87,182,777.89 —
0.05 45
20 Kloeckner & Co USA Beteiligungs GmbH,
Duisburg, Germany . . ............... 100.00 5 EUR 160,025,000.00 — 1)
—
21 Klöckner USA Holding Inc., Wilmington,
Delaware, USA .................... 100.00 5 USD 165,925,739.31 68,128,636.94 —
22 Klöckner Namasco Holding Corporation,
Wilmington, Delaware, USA ......... 100.00 21 USD 446,416,821.30 72,987,263.62 —
23 Namasco Corporation, Wilmington,
Delaware, USA . ............... 100.00 22 USD 446,495,996.39 23,698,676.44 824,858,704.65
24 Namasco Holding Corporation,
Wilmington, Delaware, USA . ..... 100.00 23 USD 109,714,417.27 — —
25 Namasco Metals L.P., Dallas, Texas,
USA .................... 99.00 24 USD 110,822,825.53 26,666,173.48 242,289,885.06
1.00 23
26 Klöckner Namasco Receivables
Corporation, Roswell, USA .... 100.00 25 USD — — —
27 Namasco Receivables Corporation,
City of Dover, Delaware, USA . . 100.00 25 USD — — —
1) Profit and loss transfer agreement
F-169

Curr.
no. Company
Participationpercentage
Held by
current
no.
Currency
Equity in local
currency
Net income
local currency
Sales in local
currency
28 NC Receivables Corporation,
Wilmington, Delaware, USA . . . 100.00 25 USD 2,294,352.74 27,190.81 —
29 Primary Steel LLC, Middletown,
Connecticut, USA . . . .......... 100.00 23 USD 240,514,675.52 23,012,639.50 682,424,563.08
30 Kloeckner Burlington Limited, Burlington,
Ontario, Canada . . . ............... 100.00 48 CAD 4,025,841.01 65,828.87 —
31 Kloeckner Alberta Limited, Calgary, Alberta,
Canada . . . .................... 100.00 48 CAD 1,045,817.74 (546,954.14) —
32 Temtco Steel, LLC, Wilmington, Delaware,
USA........................... 100.00 21 USD 201,465,318.37 8,595,395.93 5) 220,352,177.82
33 Klöckner Distribution Industrielle S.A.,
Aubervilliers, France . ............... 90.00 5 EUR 66,077,048.00 (13,242,388.00) —
34 Buysmetal N.V., Harelbeke, Belgium . ..... 99.99 33 EUR 16,071,122.63 3,132,087.42 65,153,539.54
0.01 35
35 KDI S.A.S., Aubervilliers, France . . . ..... 100.00 33 EUR 6,935,642.00 (150,026,524.00) 1,016,888,731.00
36 Adrien Targe S.A., La Grand Croix,
France . . .................... 100.00 35 EUR 5,113,111.00 374,413.00 31,748,639.00
37 Davum Ocean Indien S.A.S., Le Port,
La Réunion, France .............. 100.00 35 EUR 3,854,329.00 1,058,428.00 27,492,044.00
38 KDI Export S.A.S., Cergy-Pontoise,
France . . .................... 100.00 35 EUR 765,686.00 (791,229.00) 98,678,146.00
39 KDI Immobilier S.A.S., Aubervilliers,
France . . .................... 100.00 35 EUR 71,003,771.00 5,726,990.00 10,846,568.00
40 Prafer SNC, Woippy, France .......... 100.00 35 EUR 1,950,706.00 844,412.00 12,987,184.00
41 Tournier Holding S.A.S., Lagny sur
Marne, France . . ............... 100.00 35 EUR 8,595,733.00 1,061,432.00 —
42 Tournier S.A.S., Croissy Beaubourg,
France . .................... 100.00 41 EUR 5,253,824.00 1,180,649.00 32,635,205.00
43 SNPI S.A.S., Croissy Beaubourg,
France . .................... 100.00 41 EUR 1,609,250.00 391,303.00 8,290,319.00
44 Reynolds European S.A.S., Rueil Malmaison,
France ........................ 100.00 33 EUR 12,897,496.00 (3,098,242.00) 114,751,097.00
45 Klöckner Global Sourcing GmbH, Duisburg,
Germany........................ 100.00 5 EUR 30,032.06 — 1)
49,546,592.16
46 Klöckner Information Services GmbH,
Duisburg, Germany . . ............... 51.00 5 EUR 2,830,894.07 1,619,180.72 15,168,046.59
47 Debrunner Koenig Informatik AG, Dietikon,
Switzerland . .................... 50.00 7 CHF 172,370.22 72,370.22 1,347,102.75
50.00 46
48 Klöckner Netherlands Holding B.V.,
Barendrecht, The Netherlands .......... 100.00 5 EUR 95,381,087.29 55,788,674.94 —
49 Klöckner & Co Financial Services B.V.,
Rotterdam, The Netherlands .......... 100.00 48 EUR 19,091,909.25 635,724.16 —
50 ODS B.V., Rotterdam, The Netherlands .... 100.00 48 EUR 59,086,706.87 13,878,672.64 367,460,287.01
51 ODS Metals N.V., Antwerp, Belgium .... 99.50 50 EUR 990,614.11 260,101.75 9,007,717.61
52 O-D-S N.V., Antwerp, Belgium . . . ..... 100.00 50 EUR 1,343,945.40 341,660.88 5,020,466.71
53 O-D-S Transport B.V., Barendrecht, The
Netherlands ................... 100.00 50 EUR 18,000.00 — —
54 Teuling Staal B.V., Barendrecht, The
Netherlands ................... 100.00 50 EUR 7,671,251.83 2,357,094.23 15,179,674.82
55 Klöckner Participaciones SA, Madrid, Spain . . 100.00 5 EUR 2,462,263.02 2,937,730.28 —
56 Comercial de Laminados S.A., Barcelona,
Spain ......................... 100.00 55 EUR 48,418,691.89 (1,487,346.65) 145,068,399.85
57 Aesga Aceros Especiales S.A., Madrid,
Spain . . . .................... 100.00 56 EUR 2,859,464.10 658,805.84 14,510,100.78
58 Cortichapa S.A., Valencia, Spain . . ..... 85.00 56 EUR 9,498,954.04 2,245,000.98 6,017,917.53
15.00 61
1) Profit and loss transfer agreement
5) Short period May 5 to December 31, 2008
F-170

Curr.
no. Company
Participationpercentage
Held by
current
no.
Currency
Equity in local
currency
Net income
local currency
Sales in local
currency
59 Hierros del Cantábrico S.A., Asturias,
Spain . . . .................... 100.00 56 EUR 11,470,752.05 4,262,924.70 48,002,175.70
60 Hierros del Ebro S.A., Zaragoza, Spain. . . 100.00 56 EUR 12,398,368.21 1,594,989.56 51,873,613.07
61 Hierros del Turia S.A., Valencia, Spain . . . 80.00 56 EUR 18,816,383.95 (26,632,210.97) 70,092,746.95
62 Hierros Guadalquivir S.A., Seville,
Spain . . . .................... 100.00 56 EUR 18,687,704.33 1,526,759.16 66,968,874.82
63 Klöckner Aluminio Ibérica S.A., Madrid,
Spain . . . .................... 100.00 56 EUR 1,060,220.46 (914,692.46) 6,808,158.04
64 Materiales Siderúrgicos S.A., Madrid,
Spain . . . .................... 100.00 56 EUR 7,312,100.31 722,174.02 36,724,393.25
65 Perfiles Aragón S.A., Zaragoza, Spain . . . 100.00 56 EUR 11,052,727.78 346,993.41 22,358,163.82
66 Suministros Loinaz S.A., Guipuzcoa,
Spain . . . .................... 100.00 56 EUR 7,640,723.69 533,803.81 42,191,387.72
67 Klöckner Stahl- und Metallhandel GmbH,
Duisburg, Germany . . ............... 100.00 5 EUR 81,934,377.62 — 1) 1,438,159,151.43
68 Edelstahlservice Mágocs
Nemesacélfeldolgozó Kft, Mágocs,
Hungary . . . .................... 100.00 67 HUF 31,452,722.00 6,181,930.00 198,071,509.00
69 Dobbertin Drahthandel GmbH, Hamburg,
Germany ...................... 100.00 67 EUR 134,515.52 8,440.96 —
70 Klöckner Romania S.R.L., Bucharest,
Romania . . .................... 95.00 67 RON (3,877,276.44) (3,460,705.00) 19,565,672.00
5.00 69
71 Klöckner Stahl und Metall Ges.m.b.H,
Vienna, Austria . . . ............... 100.00 67 EUR 2,675,558.41 1,476,456.66 —
72 Metall- und Service-Center GmbH Nfg.
KG, Vienna, Austria . . . .......... 51.00 71 EUR 6,892,752.37 2,927,998.54 74,419,565.96
73 Klöckner Stahlhandel CZ, s.r.o., Prague,
Czech Republic . . . ............... 100.00 67 CZK 39,288,086.75 (7,637,106.13) 430,668,788.38
74 Klöckner Stal i Metal Polska Sp. z o.o.,
Poznań, Poland . . . ............... 99.99 67 PLN 4,381,333.51 (5,047,082.30) 105,237,378.41
0.01 69
75 Klöckner Metalsnab AD, Sofia, Bulgaria ..... 99.75 5 BGN 22,254,028.46 13,958,199.02 83,084,832.32
76 Klöckner UK France Holding Ltd., Leeds,
United Kingdom ................... 100.00 5 GBP 35,228,028.00 14,265,898.00 —
77 ASD Limited, Leeds, United Kingdom. .... 100.00 76 GBP 45,968,168.00 7,525,313.00 304,554,798.00
78 ASD Metal Services Ltd., Leeds, United
Kingdom . .................... 100.00 77 GBP 2.00 — —
79 ASD Interpipe Ltd., Leeds, United
Kingdom . . .................... 100.00 76 GBP 1,449,785.00 496,921.00 15,254,319.00
80 Klöckner Metal Services Ltd., Leeds, United
Kingdom . . .................... 100.00 76 GBP 8,585,015.00 1,669,880.00 68,871,178.00
81 Klöckner UK Holdings Ltd. i.L., Leeds,
United Kingdom . . ............... 100.00 76 GBP — 860,868.00 —
82 Richardsons Westgarth Ltd., Leeds, United
Kingdom . . .................... 100.00 76 GBP 17,379,253.00 — —
83 Armstrong Plate Ltd., Leeds, United
Kingdom . .................... 100.00 82 GBP (584,019.00) — —
84 Berry Hill Group Ltd., Leeds, United
Kingdom . .................... 100.00 82 GBP 1,872,067.00 — —
85 James & Tatton Ltd., Leeds, United
Kingdom . . ............... 100.00 84 GBP 2,096,520.00 — —
86 Gardiner, Barugh & Jones Ltd., Leeds,
United Kingdom . ............... 100.00 82 GBP 1,561,971.00 — —
87 Grange Steels Ltd., Leeds, United
Kingdom . .................... 100.00 82 GBP 558,489.00 — —
88 Hilton Steels Ltd., Leeds, United
Kingdom . .................... 100.00 82 GBP (83,890.00) — —
89 Humber Steel Stockholders Ltd., Leeds,
United Kingdom . ............... 100.00 82 GBP 2,371,118.00 — —
1) Profit and loss transfer agreement
F-171

Curr.
no. Company
Participationpercentage
Held by
current
no.
Currency
Equity in local
currency
Net income
local currency
Sales in local
currency
90 John O. Holt & Sons Ltd., Leeds, United
Kingdom . .................... 100.00 82 GBP 249,843.00 — —
91 Armstrong Steel Ltd., Leeds, United
Kingdom . . ............... 100.00 90 GBP 19,094,504.00 4,470,363.00 95,728,372.00
92 JRS Steel Stockholders Ltd., Leeds,
United Kingdom . ............... 100.00 82 GBP (762,236.00) — —
93 Organically Coated Steels Ltd., Leeds,
United Kingdom . ............... 100.00 82 GBP 2,803,828.00 — —
94 Parkin Steel Stockholders Ltd., Leeds,
United Kingdom . ............... 100.00 82 GBP 343,591.00 — —
95 Peterborough Steels Ltd., Leeds, United
Kingdom . .................... 100.00 82 GBP (370,622.00) — —
96 RW Doncaster Ltd., Leeds, United
Kingdom . .................... 100.00 82 GBP (319,199.00) — —
97 RW Project Metals Ltd., Leeds, United
Kingdom . .................... 100.00 82 GBP 46,299.00 — —
98 Westgarth Aberdeen Ltd., Bathgate, United
Kingdom . .................... 100.00 82 GBP (116,022.00) — —
99 ASD Westok Limited, Leeds, United
Kingdom . . .................... 100.00 76 GBP 7,051,863.00 2,946,644.00 30,054,046.00
100 ASD Multitubes Ltd., Leeds, United
Kingdom . . .................... 100.00 76 GBP (71,542.00) (77,709.00) 4,387,579.00
101 Klöckner S.à r.l., Luxembourg . . . .......... 100.00 4 EUR 12,500.00 — —
102 Klöckner Investment SCA, Luxembourg . . ..... 96.77 4 EUR (1,608,800.77) 15,053,647.77 —
3.23 101
103 Klöckner Finance S.à r.l., Luxembourg . ..... 100.00 102 EUR 30,541.24 7,629.86 —
II. Non-consolidated affiliated companies
104 KDI Courtages SARL, Paris, France .............. 99.80 33 EUR 25,749.00 296.00 16,593.00
105 Klöckner Steel Company Ltd., Leeds, United Kingdom . . 100.00 6 GBP 61,266.00 — —
106 O-D-S do Brasil Sistemas de Medicao LTDA Campinas,
Sao Paolo, Brasil . . ......................... 80.00 50 BRL 957,183.97 (43,972.03) 4)
—
107 Richardson Westgarth Employees Trustees Ltd., Leeds,
United Kingdom . . ......................... 100.00 82 GBP 1.00 — —
108 Sammi Klöckner International GmbH, Duisburg,
Germany................................ 100.00 6 EUR (14,050,597.13) (6,841.19) 3)
—
109 UAB Klöckner Baltija, Klaipeda, Lithuania ......... 100.00 5 LTL 97,093.00 (2,907.00) 2)
—
III. Associate
110 Birs-Stahl AG, Birsfelden, Switzerland . . .......... 50.00 9 CHF 611,536.53 36,472.30 3)
1,970,011.05
IV. Participation of or over 20%
111 GIE Mer, La Réunion, France . . . ............... 20.00 37 EUR (12,288.00) (20,288.00) 3)
15,000.00
2) Financial statements as of December 31, 2006
3) Financial statements as of December 31, 2007
4) Financial statements as of September 30, 2008
F-172

Annex to the notes to the financial statements and notes to the consolidated statements of
Klöckner & Co SE
Information pursuant to section 160 para. 1 No. 8 AktG
Notifying institutions Domicile
Voting
interests
in%
Date on which
threshold was met
Increase over threshold
FIL Investments International ........ Hildenborough, United Kingdom 3.66 December 19, 2008
FIL Investment Management Limited . . Hildenborough, United Kingdom 3.68 December 19, 2008
FIL Limited ..................... Hamilton, Bermuda 3.68 December 19, 2008
Deka Investment GmbH ............ Frankfurt, Germany 3.07 October 13, 2008
Deka Investment GmbH ............ Frankfurt, Germany 3.00 January 23, 2008
UBSAG ....................... Zurich, Switzerland 5.57 May 26, 2008
UBSAG ....................... Zurich, Switzerland 5.25 January 21, 2008
UBSAG ....................... Zurich, Switzerland 3.01 May 15, 2008
UBSAG ....................... Zurich, Switzerland 3.28 January 16, 2008
TPG-Axon Partners, L.P. ........... NewYork, USA 3.25 December 14, 2007 *)
TPG-Axon Partners, L.P. ........... NewYork, USA 5.38 December 19, 2007 *)
TPG-Axon Partners (Offshore), Ltd. . . . Georgetown, Cayman Islands 3.25 December 14, 2007 *)
TPG-Axon Partners (Offshore), Ltd. . . . Georgetown, Cayman Islands 5.38 December 19, 2007 *)
TPG-Axon Partners GP, L.P. ........ Delaware, USA 3.25 December 14, 2007 *)
TPG-Axon Partners GP, L.P. ........ Delaware, USA 5.38 December 19, 2007 *)
TPG-Axon Capital Management, L.P. . . New York, USA 3.25 December 14, 2007 *)
TPG-Axon Capital Management, L.P. . . New York, USA 5.38 December 19, 2007 *)
TPG-Axon GP, LLC ............... Delaware, USA 3.25 December 14, 2007 *)
TPG-Axon GP, LLC ............... Delaware, USA 5.38 December 19, 2007 *)
Dinakar Singh LLC ............... Delaware, USA 3.25 December 14, 2007 *)
Dinakar Singh LLC ............... Delaware, USA 5.38 December 19, 2007 *)
Dinakar Singh ................... USA 3.25 December 14, 2007 *)
Dinakar Singh ................... USA 5.38 December 19, 2007 *)
Virmont S.à r.l.. .................. Luxembourg, Luxembourg 3.11 June 7, 2007 *)
Virmont S.à r.l.. .................. Luxembourg, Luxembourg 5.01 November 13, 2007 *)
Decrease under threshold
Alken Fund SICAV ............... Luxembourg, Luxembourg 4.85 January 29, 2008
Alken Fund SICAV ............... Luxembourg, Luxembourg 2.97 February 3, 2009
Alken Asset Management, LLP. ...... London, United Kingdom 4.95 January 29, 2008 **)
Virmont S.à r.l.. .................. Luxembourg, Luxembourg 2.97 February 3, 2009
Virmont S.à r.l.. .................. Luxembourg, Luxembourg 4.85 January 29, 2008
Franklin Mutual Advisers, LLC ...... Short Hills, USA 9.89 November 21, 2008
Deka Investment GmbH ............ Frankfurt, Germany 2.91 October 22, 2008
Deka Investment GmbH ............ Frankfurt, Germany 2.9966 February 8, 2008
TPG-Axon Partners, L.P. ........... NewYork, USA 4.88 August 21, 2008
TPG-Axon Partners, L.P. ........... NewYork, USA 2.84 September 12, 2008
TPG-Axon Partners (Offshore), Ltd. . . . Georgetown, Cayman Islands 4.88 August 21, 2008
TPG-Axon Partners (Offshore), Ltd. . . . Georgetown, Cayman Islands 2.84 September 12, 2008
TPG-Axon Partners GP, L.P. ........ Delaware, USA 4.88 August 21, 2008
TPG-Axon Partners GP, L.P. ........ Delaware, USA 2.84 September 12, 2008
TPG-Axon Capital Management, L.P. . . New York, USA 4.88 August 21, 2008
F-173

Notifying institutions Domicile
Voting
interests
in%
Date on which
threshold was met
TPG-Axon Capital Management, L.P. . . New York, USA 2.84 September 12, 2008
TPG-Axon GP, LLC ............... Delaware, USA 4.88 August 21, 2008
TPG-Axon GP, LLC ............... Delaware, USA 2.84 September 12, 2008
Dinakar Singh LLC ............... Delaware, USA 4.88 August 21, 2008
Dinakar Singh LLC ............... Delaware, USA 2.84 September 12, 2008
Dinakar Singh ................... USA 4.88 August 21, 2008
Dinakar Singh ................... USA 2.84 September 12, 2008
TIAA Board of Overseers ........... NewYork, USA 0.00 August 20, 2007 *)
Teachers Insurance and Annuity
Association of America ........... NewYork, USA 0.00 August 20, 2007 *)
UBSAG ....................... Zurich, Switzerland 2.20 May 27, 2008
UBSAG ....................... Zurich, Switzerland 0.99 January 22, 2008
FIL Investments International ........ Hildenborough, United Kingdom 5.01 October 25, 2007 *)
FIL Investments International ........ Hildenborough, United Kingdom 4.72 April 29, 2008
FIL Investments International ........ Hildenborough, United Kingdom 2.99 May 13, 2008
FIL Investment Management Limited . . Hildenborough, United Kingdom 5.03 October 25, 2007 *)
FIL Investment Management Limited . . Hildenborough, United Kingdom 4.72 April 29, 2008
FIL Investment Management Limited . . Hildenborough, United Kingdom 2.99 May 13, 2008
Fidelity International Limited ........ Hamilton, Bermuda 5.03 October 25, 2007 *)
FIL Limited ..................... Hamilton, Bermuda 4.72 April 29, 2008
FIL Limited ..................... Hamilton, Bermuda 2.99 May 13, 2008
Fidelity Investment Funds ........... Hildenborough, United Kingdom 3.36 January 29, 2008
Fidelity Investment Funds ........... Hildenborough, United Kingdom 2.78 April 30, 2008
*) Notification in 2008
**) Notification subsequently rescinded
F-174

The following auditor’s report, prepared in accordance with § 322 HGB (“Handelgesetzbuch”: “German
Commercial Code”), refers to the complete consolidated financial statements, comprising the statement of income,
the balance sheet, the statement of cash flows, the summary of changes in equity and the notes to the consolidated
financial statements, together with the group management report which is combined with the management report of
Klöckner & Co SE for the business year from January 1, 2008 to December 31, 2008. The combined group
management report is not included in this prospectus.
AUDITOR’S REPORT
We have audited the consolidated financial statements prepared by Klöckner & Co SE, Duisburg, comprising
the balance sheet, the income statement, statement of changes in equity, cash flow statement and the notes to the
consolidated financial statements, together with the Group management report which is combined with the
management report of Klöckner & Co SE for the business year from January 1 to December 31, 2008.
The preparation of the consolidated financial statements and the Group management report in accordance with
IFRSs, as adopted by the EU, and the additional requirements of German commercial law pursuant to section 315a
para. 1 HGB are the responsibility of the parent company’s management. Our responsibility is to express an opinion
on the consolidated financial statements and on the Group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with section 317 HGB
(Handelsgesetzbuch “German Commercial Code”) and German generally accepted standards for the audit of
financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW) as well as supplementary consideration
of International Standards on Auditing (ISA). Those standards require that we plan and perform the audit
such that misstatements materially affecting the presentation of the net assets, financial position and results of
operations in the consolidated financial statements in accordance with the applicable financial reporting framework
and in the Group management report are detected with reasonable assurance.
Knowledge of the business activities and the economic and legal environment of the Group and expectations as
to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the
accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial
statements and the Group management report are examined primarily on a test basis within the framework of the
audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the
determination of entities to be included in consolidation, the accounting and consolidation principles used and
significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements and Group management report. We believe that our audit provides a reasonable basis for our
opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs, as
adopted by the EU, the additional requirements of German commercial law pursuant to section 315a para. 1 HGB
and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance
with these requirements. The Group management report is consistent with the consolidated financial statements and
as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risks of future
development.
Cologne
March 3, 2009
KPMG Hartkopf + Rentrop Treuhand KG
Wirtschaftsprüfungsgesellschaft
Philippi
Wirtschaftsprüfer
Michels-Scholz
Wirtschaftsprüfer
F-175

AUDITED UNCONSOLIDATED ANNUAL FINANCIAL STATEMENTS
OF KLÖCKNER & CO SE AS OF AND FOR FINANCIAL YEAR
ENDED DECEMBER 31, 2010 (HGB)
F-176

Income statement for the period from January 1 to December 31, 2010
2010 2009
(E thousand)
Other operating income. ................................................. 18,043 16,288
Personnel expenses ..................................................... (17,354) (16,600)
Depreciation of intangible assets and property, plant and equipment ................. (315) (239)
Other operating expenses ................................................ (22,328) (31,356)
Income from investments ................................................ 62,152 57,980
Other interest and similar income .......................................... 36,052 29,686
Interest and similar expenses. ............................................. (29,317) (24,478)
Result from ordinary activities ........................................... 46,933 31,281
Extraordinary income ................................................... 383 —
Extraordinary result ................................................... 383 —
Income taxes ......................................................... 89 —
Other taxes. .......................................................... (53) (36)
Net income .......................................................... 47,352 31,245
Unappropriated profits carried forward ...................................... 17,700 17,700
Appropriation to other revenue reserves. ..................................... (17,700) (31,245)
Unappropriated profits ................................................. 47,352 17,700
F-177

Balance sheet as of December 31, 2010
December 31,
2010
(E thousand)
December 31,
2009
Assets
Intangible assets ................................................. 508 385
Property, plant and equipment ....................................... 647 459
Investments in affiliated companies ................................... 258,328 258,303
Fixed assets .................................................... 259,483 259,147
Trade receivables ................................................ 176 36
Receivables from affiliated companies ................................. 1,064,132 807,839
Other assets .................................................... 18,057 49,964
Cash and cash equivalents .......................................... 9 89
Current assets .................................................. 1,082,374 857,928
Prepaid expenses ................................................ 73,630 56,224
Total assets .................................................... 1,415,487 1,173,299
Equity and liabilities
Equity
Subscribed capital. ............................................... 166,250 166,250
Capital reserves ................................................. 473,100 437,965
Other revenue reserves ............................................ 75,693 57,837
Unappropriated profits ............................................ 47,352 17,700
Equity ........................................................ 762,395 679,752
Provisions for pensions and similar obligations .......................... 9,018 10,186
Provisions for taxes .............................................. 333 325
Other provisions ................................................. 8,481 9,380
Bonds ........................................................ 609,100 422,900
Trade payables .................................................. 529 689
Liabilities to affiliated companies .................................... 21,913 49,857
Other liabilities. ................................................. 3,718 210
Total equity and liabilities ........................................ 1,415,487 1,173,299
F-178

Movements in intangible assets, property, plant and equipment and non-current investments in 2010
(annex to the notes)
As of
December 31,
2009 Additions Transfers Disposals
Cost Accumulated amortization and depreciation Carrying amounts
As of
December 31,
2010
As of
December 31,
2009
(E thousand)
Current year
amortization
and
depreciation Disposals
As of Book value as Book value as
December 31, of Dec. 31, of Dec. 31,
2010 2009 2010
I. Intangible assets
1. Concessions, industrial rights
and similar rights and licenses
in such rights. . . . . . . . . . 735 315 59 4 1,105 409 192 4 597 326 508
2. Prepayments . . . . . . . . . .
II. Property, plant and
equipment
59 — (59) — — — — — — 59 —
1. Buildings . . . . . . . . . . . .
2. Other equipment, operating
114 102 — — 216 34 23 — 57 80 159
and office equipment . . . . . 636 209 — 16 829 257 100 16 341 379 488
III. Non-current investments
Investments in affiliated
companies . . . . . . . . . . . 258,303 25 — — 258,328 — — — — 258,303 258,328
259,847 651 — 20 260,478 700 315 20 995 259,147 259,483
F-179

Notes to the financial statements for the 12-month period ending December 31, 2010
1. General information
Klöckner & Co SE (the “Company”) is the parent company of the Klöckner & Co Group. With approximately
250 locations in Europe and North America, the Klöckner & Co Group is the largest mill-independent distributor of
steel products and other materials for the combined European and North American market.
The main activity of Klöckner & Co SE is the management of operations of the Klöckner & Co Group. The
company directly or indirectly controls the management companies of the Group’s operating subsidiaries in
Germany and Austria, The Netherlands, France, Belgium, the UK, Spain, Switzerland and in Eastern Europe and
the US.
The shares of Klöckner & Co SE have been listed on the regulated market (Regulierter Markt) of the Frankfurt
Stock Exchange since the IPO on June 28, 2006 and the shares were added to Deutsche Börse’s MDAX» index on
January 29, 2007.
2. Initial application of the german accounting law modernization act (BilMoG)
In 2010 Klöckner & Co SE initially applied the German Accounting Law Modernization Act of May 25, 2009
(BilMoG — Bilanzrechtsmodernisierungsgesetz) for the compilation of its annual financial statements. In accordance
with Section 67 para. 8 sentence 2 of the Introductory Act of the German Commercial Code (EGHGB —
Einführungsgesetz zum Handelsgesetzbuch). The Company made use of the allowed alternatives for implementation
as follows:
Internally generated intangible assets were not capitalized.
The total adjustment to the provision for pensions and similar obligations was directly recorded in revenue
reserves.
The adjustment to other provisions was expensed as incurred. The provision was adjusted as of January 1,
2010. The option to carry forward the balances was not elected.
Deferred tax assets were not capitalized.
The initial application of the BilMoG as of January 1, 2010 resulted in the following changes:
As previously
reported
Initial
application
BilMoG As restated
Fixed assets ............................................ 259,147
(E thousand)
— 259,147
Current assets .......................................... 857,928 (3,199) 854,729
Prepaid expenses ........................................ 56,224 — 56,224
Total assets ............................................ 1,173,299 (3,199) 1,170,100
Equity ................................................
thereof extraordinary income/expenses recorded in income
679,752 538 680,290
statement .......................................... — 383 383
Provisions for pensions and similar obligations .................. 10,186 (2,743) 7,443
Other provisions. ........................................ 9,705 (994) 8,711
Liabilities ............................................. 473,656 — 473,656
Total equity and liabilities ................................ 1,173,299 (3,199) 1,170,100
3. Accounting policies
The financial statements for the financial year from January 1 to December 31, 2010 were compiled in
accordance with the German Commercial Code (HGB — Handelsgesetzbuch) amended by the BilMoG and the
German Stock Corporations Act (AktG — Aktiengesetz) as required for large corporations. Klöckner & Co SE
compiles consolidated financial statements under International Financial Reporting Standards (IFRS) as adopted by
the EU. The consolidated financial statements will be published in the electronic Federal Gazette.
The presentation of the financial statements adheres to Sections 266 — 278 German Commercial Code
(HGB).
F-180

Assets
Acquired intangible assets as well as property, plant and equipment are generally carried at cost less
accumulated amortization and depreciation in accordance with the German Commercial Code. Internally generated
intangible assets were not capitalized. Moveable property, plant and equipment subject to depreciation are
amortized on a straight-line basis. Low-value assets are expensed on acquisition. Impairment losses are recognized
if the carrying amount exceeds fair value or value in use. Other property and equipment is amortized over useful
lives between three and 13 years.
Non-current financial assets are stated at acquisition cost; impairment losses are recognized for other than
temporary declines in value.
Receivables and other assets are generally stated at cost. Specific valuation allowances are established to
account for identifiable risks. Receivables denominated in foreign currencies are translated at the average exchange
rate at the reporting date. Section 253 para. 1 sentence 1 and Section 252 para. 1 no. 4 HGB will not be applied on
receivables with a remaining maturity of less than 12 months.
Equity and liabilities
Provisions for pensions and similar obligations are measured using the projected unit credit method in analogy
to IAS 19. In accordance with the requirements of BilMoG the parameters for valuation were 2.5% for salary
increase and 2.0% for pension increase. Unchanged, the biometrical parameters are based on Professor Dr. Klaus
Heubeck’s guidelines 2005 G. The obligation is discounted with the average market rate that is based on an assumed
15-year maturity and is published by the German Central Bank (Deutsche Bundesbank). At the reporting date this
interest rate is 5.15%. Assets will be offset against the corresponding liability if they are excluded from the access of
creditors and exclusively used to fulfill pension obligations.
Other accrued expenses account for all identifiable and pending risks. They are recorded at their pay-off
amount that is estimated with due care and diligence of a prudent businessman. Provisions with a maturity of more
than one year are discounted on the reporting date. The average market rates of the previous seven years according
to the corresponding maturity of the provisions published by the German Central Bank were used as discount rates.
Liabilities are generally stated at their settlement amount. Liabilities in foreign currencies with a maturity of up
to one year are generally converted by the average rate on reporting date. Liabilities in foreign currency with a
longer maturity are converted by the rate at initial issue or the higher average rate on the reporting date.
Income statement
The income statement is prepared according to the nature of expense method per Section 275 para. 2 HGB.
In contrast to the previous year, interest cost on pensions is stated in net interest income.
The adjustments to BilMoG effecting net income are reported in the extraordinary result.
4. Fixed assets
The development of fixed assets is presented in the movement schedule.
Klöckner & Co SE holds via its shares in the intermediate holding company Multi Metal Beteiligungs GmbH
(“MMB”), Duisburg, an investment in Klöckner & Co International GmbH, Duisburg (“Klöckner & Co International
GmbH”), which has a 100% stake in the Klöckner & Co Verwaltung GmbH. Klöckner & Co Verwaltung
GmbH directly or indirectly holds the operating companies of the Klöckner & Co Group. In addition the Company
holds 100% of the shares of Klöckner & Co Financial Services S.A., Luxembourg.
Furthermore, Klöckner & Co SE holds 100% of the shares in Becker Besitz GmbH, Duisburg, founded in
February 2010.
A listing of all subsidiaries is presented in the appendix.
F-181

5. Accounts receivable and other assets
2010 2009
Trade receivables ....................................................
(E thousand)
176 36
Receivables from affiliated companies ..................................... 1,064,132 807,839
Other assets ........................................................ 18,057 49,964
1,082,365 857,839
The accounts receivable due from affiliated companies are with A167,875 thousand (2009: A169,333 thousand)
attributable to MMB and relate to loans, to the 2010 profit transfer and to the current clearing. Furthermore, loan
receivables of A881,454 thousand (2009: A633,898 thousand) due from Klöckner & Co Verwaltung GmbH relate to
loans out of the issuance of the convertible bonds by Klöckner & Co Financial Services S.A., Luxembourg, and the
transfer of cash from prior-year rights issue.
The receivables and other assets have a remaining maturity of less than one year.
6. Cash and cash equivalents
Cash and cash equivalents consist of bank balances.
7. Prepaid expenses
The discounts on issuance of the convertible bonds of A124,394 thousand were capitalized as prepaid expenses
in 2007, 2009 and 2010, respectively and are amortized over the remaining maturity of the bonds. In 2010,
amortization expenses included in interest expense amounted to A17,994 thousand (2009: A15,646 thousand). The
remaining unamortized discounts stood at A72,960 thousand (2009: A55,821 thousand) as of the end of the financial
year 2010.
In addition prepaid expenses include prepaid rents.
8. Equity
The subscribed capital of Klöckner & Co SE as of December 31, 2010 amounts to A166,250,000.00 and
consists of 66,500,000 registered shares and is fully paid-in. The capital reserve amounts to A473,100,286.68.
The authorized capital per Section 4 para. 2 of the articles of Klöckner & Co SE so far were completely used
for rights issue in 2009. The Board of Management was authorized by resolution of the annual general meeting on
May 26, 2010 to increase the share capital in single or multiple installments with consent of the Supervisory Board
up to a total amount of A83,125,000.00 as cash contribution and/or contribution in kind by the issuance of
33,250,000 new non-par-value shares until May 25, 2015.
The capital reserve was increased by A35,135 thousand as a result of the issuance of the 2010 convertible bond.
The revenue reserves are not subject to dividend blocking constraints according to Section 268 para. 8 HGB.
9. Provisions for pensions and similar obligations
The pension obligation of Klöckner & Co SE amounts to A14,149 thousand. The plan assets exclusively consist
of reinsurance claims for which the acquisition cost are equal to their fair values (A5,131 thousand). The provision
for pensions and similar obligation are stated net of plan assets at fair values. Plan assets are measured at the asset
value of the insurance company.
Pension liabilities were reduced as a result of the initial application of the BilMoG. The reversal of
A155 thousand was allocated to revenue reserves. Expenses from the accretion of pension liabilities of
A664 thousand were offset against interest income from plan assets of A557 thousand.
10. Other provisions
The initial application of BilMoG led to a reversal of other provisions amounting to A383 thousand which were
increased in the previous year and stated in the extraordinary result in the reporting year.
F-182

Other provisions consist of:
2010 2009
(E thousand)
Personnel expenses ........................................................ 6,710 6,388
Outstanding invoices ....................................................... 1,108 1,613
Miscellaneous other provisions ............................................... 663 1,379
8,481 9,380
11. Liabilities
2010 2009
(E thousand)
Convertible bonds ..................................................... 609,100 422,900
Trade payables ....................................................... 529 689
Liabilities to affiliated companies. ......................................... 21,913 49,857
Other liabilities ....................................................... 3,718 210
635,260 473,656
In July 2007, Klöckner & Co issued via its wholly owned subsidiary Klöckner & Co Finance International S.A.
a convertible bond with an aggregated nominal value of A325 million. Payments under the bond are guaranteed by
Klöckner & Co SE. The bond which is convertible into shares of Klöckner & Co SE has a maturity of five years and
a coupon of 1.5% per annum. The conversion price has been set at A70.44.
On June 9, 2009, Klöckner & Co issued a further convertible bond with an aggregated nominal value of
A97.9 million which was issued by Klöckner & Co Financial Services S.A. and is also convertible into shares of
Klöckner & Co SE. The maturity of this bond also amounts to five years. The bond has a coupon of 6.0% and a
conversion price of A18.37.
On December 22, 2010 Klöckner & Co Financial Services S.A. issued a senior unsecured convertible bond
with a volume of A186.2 million to institutional investors outside of the US only. This bond is also guaranteed by
Klöckner & Co SE. Klöckner & Co intends to use the issue proceeds for its stated external expansion strategy
“Klöckner & Co 2020” and for general corporate purposes.
The bond has a maturity of seven years. The coupon of the bond was fixed at 2.50% per annum. Holders of the
bond are entitled to require the early redemption of the bonds after five years at the principal amount including
accrued interest. Klöckner cannot call the bond within the first five years. After five years Klöckner & Co may call
the bond if the Klöckner share price (over a certain period) exceeds 130% of the then prevailing conversion price.
The conversion price is A28.00, which represents a premium of 35.07% above the reference price of A20.73.
Other liabilities include:
2010 2009
(E thousand)
Tax payables . ............................................................. 3,673 187
Social security contributions .................................................. 41 17
Except for the convertible bonds all liabilities have a remaining maturity of less than one year.
12. Commitments
Future minimum lease payments for long-term operating leases relate with A3,705 thousand (2009:
A3,430 thousand) to 2011 and with A15,368 thousand (2009: A12,868 thousand) to financial years 2012 until
2015. In periods subsequent to 2016 the obligations amount to A4,250 thousand (2009: A6,288 thousand).
13. Other operating income
Other operating income contains income attributable to prior periods of A608 thousand (2009: A965 thousand).
F-183

14. Personnel expenses
2010 2009
(E thousand)
Wages and salaries ...................................................... 13,248 12,038
Social securities ........................................................ 1,175 929
Retirement benefit cost ................................................... 2,919 3,622
Welfare. .............................................................. 12 11
17,354 16,600
Average number of employees:
2010 2009
Salaried employees .......................................................... 116 88
Wage earners. .............................................................. 3 3
119 91
Compensation of members of the Management Board:
Gisbert Rühl,
CEO/CFO
Ulrich Becker,
COO
Fixed components. . . ...............................
Bonuses
634
(E thousand)
526 1,160 1,412
*)
Current ........................................ 333 240 573 775
Midterm .......................................
Share-based payment
225 180 405 —
**)
............................. — (205) (205) 1,366
Total ........................................... 1,192 741 1,933 3,553
Present value of benefit obligation ..................... 1,618 386 2,004 2,488
Addition in the current reporting period ................. 740 217 957 667
*) Payout 2010 less prior year accrual plus current-year accrual.
**) As of the date of legally binding arrangement or date of the modification of the exercise terms.
The amount for share-based payments represents the fair value of the virtual stock options at the grant date or
in case of modifications of the exercise terms the date on which the modification was made. During the financial
year payments for share-based compensation amounted to A537 thousand (2009: A920 thousand).
Of the additions to provisions an amount of A693 thousand is attributable to a modification of the benefit
arrangement of one Board member. Statutory pension provisions for a former Board member amount to A1,507
thousand (2009: A1,440 thousand).
Business with members of the Management Board is restricted to their above function as members of the
Management Board.
The Annual General Meeting on June 7, 2006 unanimously voted in accordance with Section 286 para. 5 HGB
not to disclose the compensation and other benefits of the members of the Management Board on an individual basis
for the financial years from 2006 up to and including 2011 as required by Section 285 No. 9 HGB. This vote was
reversed at the Annual General Meeting on May 26, 2010.
The CEO Gisbert Rühl is entitled to resign extraordinarily his contract if the limit of 30% of the voting rights is
exceeded. In case of the exercise of that right the CEO has an entitlement to the payment of a plan annual
compensation (including a plan bonus) until the end of the contracted period (December 31, 2012). At a maximum,
the payment includes the triple value of the total compensation which he received in the financial year prior to the
finalization of his contract.
15. Other operating expenses
In the 2010 financial year, remuneration for the Supervisory Board amounted to A382 thousand (2009: A339
thousand).
Other operating expenses also include fees incurred for services performed by the auditor KPMG AG,
Wirtschaftsprüfungsgesellschaft, Düsseldorf, and affiliated companies. Detailed information on audit fees can be
obtained from Note 36 to the consolidated financial statements.
F-184
2010
Total
2009
Total

Other operating expenses relate with A374 thousand (2009: A19 thousand) to prior periods.
16. Income from investments
Income from investments comprises income from the profit and loss transfer agreement with Multi Metal
Beteiligungs GmbH, Duisburg and Becker Besitz GmbH, Duisburg.
17. Interest income, net
2010 2009
(E thousand)
Other interest and similar income
— affiliated companies ..................................................
Interest and similar expenses
36,052 29,686
— affiliated companies .................................................. (11,274) (8,831)
— Interest on provisions ................................................. (107) —
— other interest and similar expenses ....................................... (17,936) (15,647)
6,735 5,208
Interest income relates with A33,984 thousand (2009: A27,636 thousand) to a loan granted to Klöckner & Co
Verwaltung GmbH.
18. Extraordinary result
The extraordinary result exclusively comprises the following income statement effects from the initial
application of BilMoG:
2010
(E thousand)
Extraordinary expenses
— Adjustment other provisions . ................................................. 383
383
19. Taxes
2010 2009
(E thousand)
Income taxes ............................................................... (89) —
Other taxes ................................................................ 53 36
(36) 36
The calculation of deferred taxes resulted in a net deferred tax asset. In accordance with Section 274 para. 1
sentence 2 HGB the Company did not elect to recognize the net deferred tax asset. Therefore, the tax expenses do
not include deferred taxes. The unrecognized net deferred tax asset result from tax losses of A17,853 thousand and
deductible temporary differences of A15,869 thousand which are only partly offset by taxable temporary differences
of A2,139 thousand.
Based on the three-year budget of Klöckner & Co SE for the years 2011 —2013 the unrecognized deferred tax
assets on loss carryforwards amount to A10,441 thousand. If the three-year budget was extended to 2014 and 2015
additional unrecognized deferred tax of A17,853 thousand would arise.
20. Contingent liabilities
The contingent liabilities of A429,734 thousand result from a guarantee for drawings of Klöckner & Co
Verwaltung GmbH under the holding credit arrangement (“Holding Facility”) in the amount of A226,039 thousand,
from promissory notes of A147,061 thousand and a further guarantee for obligations of Klöckner & Co Verwaltung
GmbH of A44,140 thousand incurred in connection with the forward contracts under a master agreement with a
bank. Besides that, the company guarantees the credit line of a foreign subsidiary in the amount of A12,494
thousand.
F-185

Based on our information that all respective Group companies are able to fulfill their obligations in the course
of their business we do not expect a utilization.
21. Other information
Information pursuant to Section 160 para.1 No. 8 German Stock Corporations Act (AktG)
In accordance with Section 21, para. 1 and Section 22, para. 2 Securities Trading Act (WpHG) the Company
was notified as follows:
Notifying institutions Domicile
Voting
interest in
percent
Date on which
threshold was
met
Increase over threshold
Norges Bank (Central Bank of Norway) a)
............... Oslo, Norway 5.15 May 20, 2010
Amundi S.A. .................................... Paris, France 3.003 b)
January 28, 2011
a) State of Norway.
b) Partly attributed holding, not cumulative.
A full listing of notifications when a threshold was met in accordance with Section 21 para. 1 and Section 22
para. 1 Securities Trading Act (WpHG) is attached as annex to the notes of the consolidated financial statements.
Corporate bodies
A listing of the members of the corporate bodies is attached as appendix.
Declaration of compliance with the German Corporate Governance Code
On December 15, 2010, the Management Board and Supervisory Board issued the declaration of compliance
in accordance with Section 161 German Stock Corporations Act (AktG) and made it permanently available to the
shareholders on the Klöckner & Co SE Web site.
Profit distribution proposal
The Management Board and the Supervisory Board propose to the Shareholder’s Meeting to distribute an
amount of A19,950,000.00 from the 2010 unappropriated surplus of A47,351,521.54 (2009: A17,699,907.99). This
corresponds to a dividend of A0.30 per share on the share capital entitled to dividend of A166,250,000.00.
Furthermore, the Management Board and the Supervisory Board propose to allocate the residual amount of
A27,401,521.54 to the other revenue reserves.
Duisburg, February 21, 2011
Klöckner & Co SE
The Management Board
Gisbert Rühl Ulrich Becker
Chairman Member
of the Management Board of the Management Board
F-186

The following auditor’s report, prepared in accordance with § 322 HGB (“Handelgesetzbuch”: “German
Commercial Code”), refers to the complete financial statements, comprising the balance sheet, the income
statement and the notes to the financial statements, together with the group management report which is combined
with the management report of Klöckner & Co SE for the business year from January 1, 2010 to December 31, 2010.
The combined group management report is not included in this prospectus.
AUDITOR’S REPORT
We have audited the annual financial statements, comprising the balance sheet, the income statement and the
notes to the financial statements, together with the bookkeeping system and its report on the position of the
Company and the Group prepared by Klöckner & Co SE, Duisburg, for the business year from January 1 to
December 31, 2010. The maintenance of the books and records and the preparation of the annual financial
statements and management report in accordance with German commercial law and supplementary provisions of
the articles of incorporation are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the annual financial statements, together with the bookkeeping system, and the management report
based on our audit.
We conducted our audit of the annual financial statements in accordance with Section 317 HGB (“Handelsgesetzbuch”:
“German Commercial Code”) and German generally accepted standards for the audit of financial
statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and
perform the audit such that misstatements materially affecting the presentation of the net assets, financial position
and results of operations in the annual financial statements in accordance with German principles of proper
accounting and in the management report are detected with reasonable assurance. Knowledge of the business
activities and the economic and legal environment of the Company and expectations as to possible misstatements
are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal
control system and the evidence supporting the disclosures in the books and records, the annual financial statements
and the management report are examined primarily on a test basis within the framework of the audit. The audit
includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the annual financial statements and management report. We believe that our
audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the annual financial statements comply with the legal
requirements and the supplementary provisions of the articles of incorporation and give a true and fair view of the
net assets, financial position and results of operations of the Company in accordance with German principles of
proper accounting. The management report is consistent with the annual financial statements and as a whole
provides a suitable view of the Company’s position and suitably presents the opportunities and risks of future
development.
Düsseldorf, February 21, 2011
KPMG AG
Wirtschaftsprüfungsgesellschaft
Philippi
Wirtschaftsprüfer
Michels-Scholz
Wirtschaftsprüfer
F-187

Annex to the notes to the financial statements and notes to the consolidated financial statements of
Klöckner & Co SE
Subsidiary listing according to Sections 285 No. 11/313 para. 2
German Commercial Code (HGB)
No. Entity
Interest
in
percent
Held by
entity
no.
Local
currency
Equity in
local
currency
Net income
in local
currency
Sales in
local
currency
1 Klöckner & Co SE, Duisburg, Germany
I. Consolidated affiliated companies
2 Multi Metal Beteiligungs GmbH, Duisburg,
Germany ......................... 100.00 1 EUR 257,932,945.30 — 1)
—
3 Klöckner & Co International GmbH, Duisburg,
Germany........................ 100.00 2 EUR 357,899,443.92 — 1)
—
4 Klöckner & Co Verwaltung GmbH, Duisburg,
Germany........................ 100.00 3 EUR 259,132,783.19 — 1)
—
5 Klöckner Global Sourcing GmbH, Duisburg,
Germany...................... 100.00 4 EUR 85,787.86 15,898.80 1)
24,027,962.88
6 Klöckner Stahl- und Metallhandel GmbH,
Duisburg, Germany . . . ............ 100.00 4 EUR 83,209,014.62 — 1) 929,113,700.85
7 Dobbertin Drahthandel GmbH,
Hamburg,Germany............ 100.00 6 EUR 39,061.39 5,370.36 —
8 ASD metal services Ltd., Leeds,
United Kingdom ............ 100.0081 GBP 2.00 — —
9 Klöckner Stal i Metal Polska Sp. z
o.o., Poznań, Poland . . . ....... 99.99 6 PLN 9,416,272.37 1,591,210.71 111,165,972.86
0.01 7
10 Klöckner Romania S.R.L., Bucharest,
Romania ................. 99.87 6 RON 5,435,353.38 (1,110,025.87) 20,753,043.72
0.13 7
11 Edelstahlservice Mágocs
Nemesacélfeldolgozó Kft, Mágocs,
Hungary. ................. 100.00 6 HUF 68,062,430.00 8,426,754.00 286,581,085.00
12 Klöckner Stahlhandel CZ, s.r.o.,
Prague, Czech Republic ....... 100.00 6 CZK 34,593,753.76 8,065,615.76 427,926,622.37
13 Klöckner Metalsnab AD, Sofia,
Bulgaria . ................. 99.77 4 BGN 8,301,572.31 (4,169,165.39) 43,490,842.94
14 Klöckner Participaciones SA,
Madrid, Spain . . ............ 100.00 4 EUR (2,240,088.02) (2,312,829.18) —
15 Klöckner Stahl und Metall
Ges.m.b.H, Vienna, Austria . . . . . 100.00 6 EUR 1,619,877.95 1,358,421.29 —
16 Klöckner & Co Financial Services S.A.,
Luxembourg ..................... 100.00 1 EUR 216,751.46 162,046.46 —
17 Klöckner S.à r.l., Luxembourg . . . ....... 100.00 3 EUR 12,500.00 — —
18 Klöckner Investment SCA,
Luxembourg . . . ............ 96.77 3 EUR 241,569.06 827,193.55 —
3.23 17
19 Klöckner & Co Financial Services B.V.,
Rotterdam, The Netherlands ...... 100.00 20 EUR 19,341,118.42 89,066.03 —
20 Klöckner Netherlands Holding B.V.,
Barendrecht, The Netherlands ....... 100.00 4 EUR 111,187,970.77 363,421.02 —
21 Buysmetal N.V., Harelbeke, Belgium . . . . 99.99 68 EUR 16,562,572.18 1,961,352.43 47,131,914.33
0.01 72
22 Metall- und Service-Center Ges.m.b.H.
Nfg. KG, Vienna, Austria . ....... 51.00 15 EUR 9,248,972.08 4,511,801.52 69,449,861.02
23 Klöckner Namasco Holding
Corporation, Wilmington,
Delaware, USA . ............ 100.00 31 USD 296,086,638.47 34,519,999.96 —
24 Klöckner Metal Services Ltd.,
Leeds, United Kingdom ...... 100.00 25 GBP 11,737,857.00 2,184,158.00 65,407,589.72
25 Klöckner UK France Holding
Ltd., Leeds,
United Kingdom . . ....... 100.00 4 GBP 30,135,774.00 (3,164,458.00) —
26 Namasco Corporation,
Wilmington, Delaware,
USA............... 100.00 23 USD 378,616,431.64 8,351,219.43 737,043,895.39
27 Lake Steel Ltd., Amarillo,
Texas, USA. .......... 100.00 26 USD 39,980,554.70 (54,980.30) 2,242,492.12
1) Profit and loss transfer agreement.
F-188

No. Entity
Interest
in
percent
Held by
entity
no.
Local
currency
Equity in
local
currency
Net income
in local
currency
Sales in
local
currency
28 Lake Operations L.L.C.,
Amarillo, Texas, USA . . . . 100.00 26 USD — — 6)
—
29 Kloeckner Burlington Limited,
Burlington, Ontario, Canada . . . 100.00 20 CAD (5,931,566.11) (582,439.64) —
30 Kloeckner Alberta Limited, Calgary,
Alberta, Canada . . ............ 100.00 20 CAD (325,462.01) 676,011.96 —
31 Klöckner USA Holding Inc.,
Wilmington, Delaware, USA ...... 100.00 4 USD (8,721,026.77) 21,666,514.32 —
32 Kloeckner & Co USA Beteiligungs
GmbH, Duisburg, Germany . ....... 100.00 4 EUR 160,025,000.00 — 1)
—
33 Temtco Steel, LLC, Wilmington,
Delaware, USA ................ 100.00 31 USD 193,304,022.41 3,681,454.69 200,583,207.48
34 Debrunner Koenig Holding AG, St.
Gallen, Switzerland ............ 100.00 4 CHF 18,328,172.55 49,580,367.01 —
35 Debrunner Acifer AG, St. Gallen,
Switzerland ................. 100.00 34 CHF 135,582,191.47 39,919,890.92 655,695,893.09
36 Molok (Valais) SA, Siders,
Switzerland . . . ............ 100.00 43 CHF 383,543.46 5,220.00 —
37 Debrunner Acifer SA Romandie,
Crissier, Switzerland . . . ....... 100.00 34 CHF 31,597,401.86 8,900,869.32 184,970,095.65
38 Debrunner Acifer SA Giubiasco,
Giubiasco, Switzerland . ....... 100.00 34 CHF 8,165,396.27 1,736,729.54 39,009,857.15
39 Metall Service Menziken AG,
Menziken, Switzerland . ....... 100.00 34 CHF 11,902,297.29 3,073,676.70 97,867,947.21
40 Klöckner Stahl AG, St. Gallen,
Switzerland . . . ............ 100.00 34 CHF 109,742.93 1,903.47 —
41 Koenig Feinstahl AG, Dietikon,
Switzerland . . . ............ 100.00 34 CHF 19,030,949.27 3,153,565.74 71,063,524.87
42 Debrunner Koenig Management
AG, St. Gallen, Switzerland . . . 100.00 34 CHF 3,227,993.82 259,443.83 —
43 Debrunner Acifer AG Wallis, Visp,
Switzerland . . ............ 100.00 34 CHF 10,829,108.22 2,021,160.94 52,978,558.54
44 Bläsi AG, Bern, Switzerland . ....... 100.00 34 CHF 20,939,229.16 4,682,806.78 44,806,902.46
45 ODS B.V., Rotterdam, The Netherlands . . 100.00 20 EUR 38,260,692.22 4,029,425.70 223,823,332.76
46 O-D-S Transport B.V., Barendrecht, The
Netherlands . . ................. 100.00 45 EUR 18,000.00 — —
47 ODS do Brasil Sistemas de Medicao
LTDA, Campinas São Paulo,
Brazil ..................... 80.00 45 BRL 6,129,572.32 3,239,402.59 13,537,499.36
48 O-D-S N.V., Antwerp, Belgium ....... 99.50 45 EUR 2,277,367.68 458,821.81 4,932,498.44
0.50 20
49 ODS Metals N.V., Antwerp, Belgium . . 100.00 45 EUR 860,376.61 (16,828.28) 6,187,166.92
50 Teuling Staal B.V., Barendrecht, The
Netherlands ................. 100.00 45 EUR 4,276,216.07 (1,086,500.70) 4,696,551.15
51 Richardsons Westgarth Ltd., Leeds,
United Kingdom ............ 100.00 25 GBP 17,379,253.00 — —
52 Armstrong Plate Ltd., Leeds, United
Kingdom ................. 100.00 51 GBP (584,019.00) — —
53 Gardiner, Barugh & Jones Ltd.,
Leeds, United Kingdom ....... 100.00 51 GBP 1,561,971.00 — —
54 Grange Steels Ltd., Leeds, United
Kingdom ................. 100.00 51 GBP 558,489.00 — —
55 Hilton Steels Ltd., Leeds, United
Kingdom . . . ................. 100.00 51 GBP (83,890.00) — —
56 Humber Steel Stockholders Ltd., Leeds,
United Kingdom . . ............ 100.00 51 GBP 2,371,118.00 — —
57 RW Project Metals Ltd., Leeds,
United Kingdom ............ 100.00 51 GBP 46,299.00 — —
58 Organically Coated Steels Ltd.,
Leeds, United Kingdom ....... 100.00 51 GBP 2,803,828.00 — —
59 Parkin Steel Stockholders Ltd.,
Leeds, United Kingdom ....... 100.00 51 GBP 343,591.00 — —
1) Profit and loss transfer agreement.
6) Amounts included in No. 27.
F-189

No. Entity
Interest
in
percent
Held by
entity
no.
Local
currency
Equity in
local
currency
Net income
in local
currency
Sales in
local
currency
60 Peterborough Steels Ltd., Leeds,
United Kingdom ............ 100.00 51 GBP (370,622.00) — —
61 RW Doncaster Ltd., Leeds, United
Kingdom ................. 100.00 51 GBP (319,199.00) — —
62 John O. Holt & Sons Ltd., Leeds,
United Kingdom ............ 100.00 51 GBP 249,843.00 — —
63 Armstrong Steel Ltd., Leeds, United
Kingdom ................. 100.00 62 GBP 15,804,980.00 821,702.00 77,024,934.28
64 Berry Hill Group Ltd., Leeds, United
Kingdom ................. 100.00 51 GBP 1,872,067.00 — —
65 James & Tatton Ltd., Leeds, United
Kingdom ................. 100.00 64 GBP 2,096,520.00 — —
66 Westgarth Aberdeen Ltd., Bathgate,
United Kingdom ............ 100.00 51 GBP (116,022.00) — —
67 JRS Steel Stockholders Ltd., Leeds,
United Kingdom . . . ............ 100.00 51 GBP (762,236.00) — —
68 Klöckner Distribution Industrielle S.A.,
Aubervilliers, France ........... 96.77 4 EUR 103,879,390.00 (5,913,880.00) —
69 KDI Export S.A.S., Cergy-Pontoise,
France . . . ................. 100.00 72 EUR 1,227,706.23 77,499.80 46,876,097.60
70 Reynolds European S.A.S., Rueil
Malmaison, France ............ 100.00 68 EUR 17,127,187.00 2,193,179.00 102,697,225.00
71 AT2T S.A.S., La Grand Croix,
France . . . ................. 100.00 72 EUR 8,509,425.80 (29,345.48) 62,134,005.64
72 KDI S.A.S., Aubervilliers, France . . . 100.00 68 EUR 123,088,941.51 24,519,018.32 742,463,432.03
73 KDI Immobilier S.A.S., Aubervilliers,
France . . . ................. 100.00 72 EUR 70,474,945.29 4,577,373.43 11,432,149.71
74 Prafer SNC, Woippy, France . ....... 100.00 72 EUR 3,566,680.20 182,078.83 6,914,426.26
75 KDI Davum S.A.S., Le Port, La Réunion,
France ...................... 100.00 72 EUR 4,277,022.49 300,477.73 20,182,930.95
76 KDI Authentic S.A.S., Aubervilliers,
France ...................... 100.00 72 EUR 8,539,461.90 (73,663.59) 335,495.56
77 Comercial de Laminados S.A.,
Barcelona, Spain . . ............ 100.00 14 EUR 62,032,538.04 (1,272,662.59) 242,338,280.20
78 Hierros del Turia S.A., Valencia,
Spain. . . ................. 80.00 77 EUR 28,976,446.67 (523,991.07) 45,173,551.38
79 Perfiles Aragón S.A., Zaragoza,
Spain ..................... 100.00 77 EUR 21,056,727.08 (853,556.99) 38,362,843.70
80 Cortichapa S.A., Valencia, Spain . . . . . 85.00 77 EUR 28,604,621.29 1,852,996.56 53,965,775.75
15.00 78
81 ASD Limited, Leeds, United
Kingdom . . ................. 100.00 25 GBP 31,848,495.00 4,223,768.00 243,159,832.66
82 ASD Westok Limited, Leeds, United
Kingdom . . ................. 100.00 25 GBP 10,223,196.00 1,002,500.00 13,433,385.57
83 ASD Interpipe Ltd., Leeds, United
Kingdom ................. 100.00 25 GBP 1,798,869.00 663,278.00 15,301,423.57
84 ASD Multitubes Ltd., Leeds, United
Kingdom ................. 100.00 25 GBP 120,716.00 671,935.00 4,585,610.86
85 NC Receivables Corporation,
Wilmington, Delaware,
USA................. 100.00 26 USD 2,305,569.24 5,171.20 —
86 Comercial de Laminados Cobros
S.L., Madrid, Spain . . . ....... 100.00 77 EUR 27,054.00 — —
87 Becker Stahl-Service GmbH,
Duisburg, Germany . . . ....... 100.00 4 EUR 286,473,763.43 36,900,523.16 535,139,102.62
88 Becker Stahl GmbH, Bönen,
Germany ................. 100.00 87 EUR 341,201.43 181,201.43 4)
265,871.76
89 Becker Transport GmbH, Duisburg,
Germany ................. 100.00 87 EUR 67,577.24 35,284.01 5)
737,466.29
4) Financial statements as of September 30, 2010.
5) Stub period from March 1 until December 31, 2010.
F-190

No. Entity
Interest
in
percent
Held by
entity
no.
Local
currency
Equity in
local
currency
Net income
in local
currency
Sales in
local
currency
90 Becker Besitz GmbH, Duisburg,
Germany ................. 100.00 1 EUR 25,000.00 — 1),5)
—
91 Umformtechnik Stendal UTS
GmbH & Co. KG, Stendal,
Germany.............. 100.00 87 EUR 2,768,438.38 (257,563.00) 4) 12,342,560.76
92 Umformtechnik Stendal UTS
Verwaltung GmbH, Stendal,
Germany ................. 100.00 91 EUR 26,743.77 743.77 4)
—
II. Non-consolidated affiliated companies
93 Sammi Klöckner International
GmbH, Duisburg, Germany . . . . . 100.00 4 EUR (14,083,020.57) (13,769.90) —
94 KDI Courtages SARL, Paris,
France . . ................. 100.00 68 EUR 13,218.00 (10,244.00) —
95 Richardson Westgarth Employees
Trustees Ltd., Leeds, United
Kingdom ................. 100.00 51 GBP 1.00 — —
96 Klöckner Steel Company Ltd., Leeds,
United Kingdom ............ 100.00 4 GBP 61,266.00 — 2)
—
97 UAB Klöckner Baltija, Klaipeda,
Lithuania ................. 100.00 4 LTL (28,345.00) (186,002.00) 3,695,423.00
98 Umformtechnik Stendal UTS s.r.o.,
Skalica, Slovakia ............ 100.00 91 EUR 82,160.00 12,958.00 35,101.00
III. Associates
99 Birs-Stahl AG, Birsfelden,
Switzerland ................. 50.00 35 CHF 690,877.41 40,599.44 3)
1,576,543.09
IV. Participations over 20%
100 GIE Mer, La Réunion, France ....... 20.00 75 EUR 11,037.00 3,037.00 2)
15,000.00
1) Profit and loss transfer agreement.
2) Financial statements as of December 31, 2008.
3) Financial statements as of December 31, 2009.
4) Financial statements as of September 30, 2010.
5) Stub period from March 1 until December 31, 2010.
F-191

Annex to the notes to the financial statements and notes to the consolidated financial statements of
Klöckner & Co SE
Information pursuant to Section 160 para. 1 No. 8 German Stock Corporations Act (AktG)
Notifying institutions Domicile
Voting
interest
in percent
Date on which
threshold was met
Increase over threshold
FIL Holdings Limited. ............. Hildenborough, United Kingdom 3.80 January 2, 2009
FIL Holdings Limited. ............. Hildenborough, United Kingdom 3.06 June 22, 2009
Norges Bank (Central Bank of
Norway) ***) ...................
Oslo, Norway 3.19 May 11, 2010
Norges Bank (Central Bank of
Norway) ***) ...................
Oslo, Norway 5.15 May 20, 2010
Amundi S.A. **) .................. Paris, France 3.03 January 3, 2011
Amundi S.A. **) ..................
Decrease below threshold
Paris, France 3.003 January 28, 2011
FIL Holdings Limited. ............. Hildenborough, United Kingdom 2.89 March 19, 2009
FIL Holdings Limited. ............. Hildenborough, United Kingdom 2.99 September 23, 2009
FIL Limited ..................... Hamilton, Bermuda 2.97 September 25, 2009 *)
FIL Investment Management Limited . . Hildenborough, United Kingdom 2.97 September 25, 2009 *)
BlackRock Institutional Trust Company,
N.A. **) .......................
California, USA 2.80 April 27, 2010
BlackRock Delaware Holdings,
Inc. **)
.......................
Delaware, USA 2.80 April 27, 2010
BlackRock Holdco 6 LLC **)
........ NewYork, USA 2.80 April 27, 2010
BlackRock Holdco 4 LLC **)
........ NewYork, USA 2.80 April 27, 2010
BlackRock Financial Management,
Inc. **)
.......................
New York, USA 4.87 April 27, 2010
BlackRock Holdco 2, Inc. **) ......... Delaware, USA 4.87 April 27, 2010
BlackRock, Inc. **) ................ NewYork, USA 4.87 April 27, 2010
BlackRock Financial Management,
Inc. **)
.......................
New York, USA 2.78 June 8, 2010
BlackRock Holdco 2, Inc. **) ......... Delaware, USA 2.78 June 8, 2010
BlackRock, Inc. **) ................ NewYork, USA 2.78 June 8, 2010
Franklin Mutual Advisers, LLC **) ..... Short Hills, USA 4.66 July 26, 2010
Franklin Mutual Series Funds ........ Short Hills, USA 4.64 July 26, 2010
Franklin Mutual Series Funds ........ Short Hills, USA 2.86 August 4, 2010
Franklin Mutual Advisers, LLC **) ..... Short Hills, USA 2.66 August 6, 2009
Amundi S.A. **) .................. Paris, France 2.98 January 20, 2011
*) Correction of prior notification.
**) Partly attributed holding.
***) State of Norway.
F-192

RECENT DEVELOPMENTS AND OUTLOOK
In the first quarter of 2011, we continued to experience the positive trend that was already visible in 2010. Our
sales increased by 51.3% driven by higher sales volumes and higher average selling prices. The increase in sales
volumes was positively impacted by our acquisitions, in particular Becker Stahl which was first consolidated on
March 1, 2010, and by the further recovery of the economy in most of our markets. Our EBITDA increased by
EUR 75.4 million from EUR 29.1 million in the first quarter of 2010 to EUR 104.5 million in the first quarter of
2011; our net income rose from EUR 1.7 million in the first quarter of 2010 by EUR 42.4 million to EUR 44.1 million
in the first quarter of 2011. The first quarter of 2011 was marked by rising steel prices which positively impacted our
gross profit margin and strong customer demand. In April and May 2011, steel prices started to decrease somewhat;
therefore we do not expect our gross profit margin in the second quarter of 2011 to reach the level of the first quarter.
At the end of April 2011, we closed the acquisition of Macsteel Service Centers USA, marking an important
milestone in the execution of our strategy “Klöckner & Co 2020”. With its steel service center business Macsteel
operates in a more stable environment and increases our value added services with higher margin potential. With our
acquisition of Macsteel, we complement our business in the United States, which was previously focused on long
and plate products, with a broad range of sheet and slit coil flat rolled steel service center products, reducing the
contribution to our sales of the construction industry. With Macsteel, our US business is expected to contribute
approximately 30% of our sales going forward. In the second quarter of 2011, we also closed the acquisition of
Frefer in Brazil. With this acquisition we aim to establish a presence in an emerging market where we believe steel
consumption will develop more dynamically than in established markets. In connection with these acquisitions
(payment of purchase prices and assumption of liabilities), we estimate that our net financial debt increased by
approximately A700 million compared to March 31, 2011. We will conduct a purchase price allocation that we
expect to finalize later this year; depreciation and amortization will increase as a result of this purchase price
allocation.
For the remainder of 2011, we expect a continued recovery of our customer industries both in Europe and
North America. The International Monetary Fund (IMF) predicts an increase of worldwide gross domestic product
(GDP) of 4.5% in 2011 and 2012, with emerging markets reaching an increase in GDP of 6.5% and industrialized
nations of 2.4% (2.8% for the United States and 1.6% for the Eurozone). According to the IMF, emerging markets
need to reduce inflationary risks; in industrialized nations high sovereign debt levels in many countries as well as
currency uncertainties may pose risks to this development. The worldwide steel association Worldsteel also expects
a continued recovery of the economy with an increase in apparent steel consumption of 6% in 2011, with 4.9% for
Europe and 13% for the United States.
Together with our recent acquisitions of Macsteel and Frefer which will be consolidated for the first time in the
second quarter of 2011 (Macsteel as of May 1, 2011; Frefer presumably as of June 1, 2011), we expect an increase
both in sales volumes and revenue of more than 25% for the full financial year 2011.
Except as discussed above, between March 31, 2011 and the date of this prospectus, there have been no
significant changes in our Group’s financial or trading position.
O-1

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Duisburg, Frankfurt am Main, Düsseldorf, Munich and London, in May 2011
Klöckner & Co SE
Signed: Gisbert Rühl Signed: Ulrich Becker
Deutsche Bank Aktiengesellschaft J.P. Morgan Securities Ltd.
Signed: Malte Hopp Signed: Matthias Höhne Signed: Klaus H. Hessberger Signed: Katrin Pfende
COMMERZBANK Aktiengesellschaft HSBC Trinkaus & Burkhardt AG
Signed: Klaus H. Hessberger Signed: Katrin Pfende Signed: Malte Hopp Signed: Matthias Höhne
The Royal Bank of Scotland N.V.
(London Branch) UniCredit Bank AG
Signed: Klaus H. Hessberger Signed: Katrin Pfende Signed: Malte Hopp Signed: Matthias Höhne
S-1

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