a n n u a l r e s u l t s

1
a n n u a l r e s u l t s
f o r t h e 1 2 m o n t h s e n d e d
d e c e m b e r 2 0 0 4
(formerly Iscor Limited) A member of Mittal Steel
Company
2
Davinder Chugh c h i e f e x e c u t i v e o
f f i c e r
3
Overview

• Record earnings of R4 541m (1 019c per share)
• International steel prices attain all time high
  levels
• Strong domestic demand growth
• Cost escalations successfully contained
• New business strategy gains momentum
• Member of the most global largest steel group
  in the world

Created substantial shareholder value
4
Key Result Drivers

• Increase in HRC US price 50
• Growth in domestic sales volume 22
• Increase in HRC cash cost per tonne (Rand)
  3
• Strengthening of Rand (average exchange rate)
  17
• Operating margin 32

Excluding BAA remuneration (1H04)
Captured benefits of market while containing costs
5
Invoiced Export Prices
Ispat Iscor invoiced prices (cf) US/t
700
Hot rolled coil
Low carbon wire rod
600
500
400
300
200
100
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Source Ispat Iscor
Paradigm shift in steel price cycle
6
Global Market
Tonnes x 1 000 000
1 170
Supply
Demand
1 120
1 070
1 020
970
920
870
820
2000
2001
2002
2003
2004
2005
2006
2007
Source World Steel Dynamics/CRU
Note Apparent Steel Demand and Supply
Stable 2005 expected
7
Global Market Trends

• Global steel demand may continue to outstrip
  supply in 2005
• Chinese economy growing at slower rate
• World economic growth is expected to continue
• Consolidation amongst steel companies globally
  gains momentum
• Steelmakers input costs will remain high

2005 average prices expected to remain firm
8
Geographic Sales
South Africa
Rest of Africa
Total Africa
Far East
European Union
North America
Middle East
0
10
20
30
40
50
60
70
80

Market optimisation
9
Domestic Market
Imports
000t
1 700
14
Quarterly consumption
Steel imports
12
Consumption trend
1 500
10
1 300
8
1 100
Consumption
Imports
6
900
4
700
2
500
0
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
Source SAISI
Domestic sales up 22 in 2004
10
Global Input Cost
Based to 100
140
Coking coal Contract
Iron ore fines Contract
130
120
110
100
90
80
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Source Coal Rush report/Tex report
Bulk commodity costs drive high steel prices
11
Global Input Cost
Based to 100
700
Freight rates
Coke
600
Scrap
500
400
300
200
100
0
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Source Baltic Exchange/Tex report/Metal Bulletin
Other process inputs also maintaining high levels
12
Global Input Cost Trends

• Iron ore expected to increase substantially in
  2005
• 05/06 Metallurgical coking coal contracts settled
  at approx 125
• Freight rates more stable, but at high levels
• Coke stabilising around 250/t after peaking at gt
  400/t in 2004
• Scrap prices expected to remain firm in 2005
• Supply chain bottle-necks addressed through
  various expansion projects internationally

Source World Steel Dynamics
High input costs likely to support firm steel
prices
13
Input Cost Positioning
Domestic supply agreements
Imported
Tonnes 000
Backward integrated
2 184
Coke
96
1
3
2 673
- Coking Coal
15
63
22
Actual 2004 data
Cost benefit from integration on most inputs
14
Key Performance Indicators
change
2004
2003
1 053
233
CI savings (Rm)
316
8.0
248
- percentage
2.3
-9
11 416
Number of full-time employees
12 539
3.7
-10
Man hours per ton steel
4.1
2 019
37
Revenue per head (R000)
1 474
1 756
3
HRC cash cost - R/t
1 696
275
22
- US/t
226
1 613
7

Billet cash cost - R/t
1 509
253
26
- US/t
201
57
39

Percentage value-add exports - flat
41
74
21

- long
61
Continuous productivity improvement
15
Liquid Steel Production
000t
7 085
7 033
7 500
6 000
4 500
3 681
3 628
3 000
2 153
2 178
1 251
1 227
1 500
0
2003
2004
2003
2004
2003
2004
2003
2004
Vanderbijlpark
Saldanha
Long products
Total
Production affected by Conarc burn-through
planned shutdowns
16
Liquid Steel Production Loss
Liquid steel (000t)

• Planned production stoppages
• Blast Furnace C throat armour repair at
  Vanderbijlpark 64
• Blast Furnace D interim repair at Vanderbijlpark
  207
• Unplanned production stoppages
• Conarc burn-through at Saldanha 67
• Production recovered other efficiency
  improvements 286
• Production not recovered 52

17
Sales Volumes
000t
7 000
Export
6 259
6 201
Domestic
6 000
5 000
3 086
2 323
4 000
3 173
3 166
3 000
1 310
943
1 894
1 899
2 000
1 187
1 141
743
943
3 173
3 878
1 000
833
637
1 863
2 224
1 151
956
354
503
2003
2004
2003
2004
2003
2004
2003
2004
Vanderbijlpark
Saldanha
Long products
Total
Strong domestic sales growth
18
Environmental

• Iscor Coke Chemical (ICC) achieved ISO 14001 in
  2004
• Now all operations ISO 14001 certified
• Major environmental projects in progress
• Vanderbijlpark
• Cleaning of coke ovens gas 306 1H/06
• Zero effluent discharge (main treatment plant)
  222 2H/05
• New sinter plant off-gas system 210
  2H/07
• Newcastle
• Coke oven repair project 231 completed
• Reverse osmosis plant 50 1H/06
• Total planned environmental spend of R964m

Planned Completion
Cost Rm
Environmental improvement gains momentum
19
Other Major Projects
Planned completion
Cost Rm

• Newcastle
• Pulverised coal injection (on schedule)
  211 1H/05
• Vanderbijlpark
• BOF control systems 112 completed
• Blast Furnace C throat armour repair
  23 completed
• Blast Furnace D interim repair
  139 completed
• Sinter plant repair and upgrade (Phase 1-3)
  42 completed
• New DRI kilns 432 1H/06
• Blast Furnace D stoves (2 months behind)
  318 2H/06
• Saldanha
• Third roll grinder 30 completed
• Iscor Coke Chemicals
• Market coke expansion 455 2H/06

Still to be approved
Significant drive for efficiency improvements
20
Vaidya Sethuraman e x e c u t i v e d i r e c t
o r f i n a n c e
21
Headline Earnings
change
Rm
2004
2003
Revenue
18 487
23 053
25
7 399
Comparable operating profit
3 375
119
36
Financing cost - net interest expense
(47)


(170)
- long-term provision
top-up
(81)
-110
(2 465)
Tax
(1 100)
-124
258
Equity earnings
115
124
(6)
Minority interest
(2)

5 052
Comparable earnings
2 260
124

793
- in USm
301
163
(511)
BAA remuneration
(429)

19

Restructuring costs
(116)



(110)


Power contract settlement


Headline earnings
1 605
4 541
183
After tax
Lower discount rate accounts for R100m
Record earnings
22
Comparable Headline Earnings Trend
Rm
1 800
1 575
1 600
1 415
1 393
1 400
1 200
1 000
800
669
657
655
596
600
352
400
200
0
1Q/03
2Q/03
3Q/03
4Q/03
1Q/04
2Q/04
3Q/04
4Q/04
Quantum jump in quarterly earnings
23
Operating Profit
change
Rm
2004
2003
Vanderbijlpark
2 179
4 129
89
Comparable operating profit
3 375
7 399
119
BAA remuneration
(613)

(731)
19
Restructuring costs
(166)






Power contract settlement
(157)


Operating profit
2 439
6 668
173
Steel prices cost containment boost profits
24
Cash Flow
Rm
2003
2004
Cash profit from operations
4 245
8 563
Working capital
(219)
(1 410)
BAA remuneration
(613)

(731)
Cash from operations
3 413

6 422
Asset sales
84
14
Capex
(1 278)
(1 254)
Finance cost
(43)

36
Tax
(1 135)
(886)
Dividends
(892)

(339)
Net cash flow
149
3 993
Strong cash flow
25
Working Capital
Rm
2003
2004





Higher working capital driven by local volume
prices
26
Financial Ratios
2003
2004
Operating margin ()
13
29
- on comparative basis ()
18
32
EBITDA margin ()
18
33
- on comparative basis ()
23
36
Revenue/invested capital (times)
1.3
1.5
Return on equity ()
13
31
- on comparative basis ()
18
35
Net cash/equity ()

0.2
24.8
Adjusted for once-off items
Continuous improvement in performance
27
Share Performance
Movement
140
Iscor
All shares
120
Top 40
100
80
60
40
20
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
-20
Source Standard Bank
Outperforming the market
28
BAA Update
Rm

• Annualised cost saving for 2H/04 926
• Payments to Mittal Steel NIL
• Cumulative realised saving 2002 to 2004 1 985
• Payments to Mittal Steel 1 344
• Management will review recommend to the Board,
  a new contract to replace expired one, which will
  be subject to approval of shareholders, other
  than Mittal Steel

Sterling contribution to our cost reduction
programme
29
Dividend

• Dividend policy
• Considering the cash position, future capital
  expenditure working capital requirements
• Distributing one third of headline earnings
  before once-off charges
• Dividend declared
• Interim dividend of 300 cents per share 17
  December 2004
• Final dividend of 100 cents per share 8
  February 2005
• Total dividend of 400 cents covered 3 times by
  adjusted EPS of 1 133 cents

30
Davinder Chugh c h i e f e x e c u t i v e o
f f i c e r
31
Strategic Goals

• Industry leading value-creation for our
  shareholders
• Positive EVA over the cycle
• Improve operating capabilities
• Value-creating throughput increases of 2 Mtpa
• 20 reduction in HRC/billet cash cost by 2007
• Build a high performance culture
• Create an environment that generates true
  employee pride attracts, develops retains
  top-performing people
• Be a responsible corporate citizen

Be among the most admired SA companies
32
Throughput Strategy

• Increase production by 1Mtpa by end 2007 with
  modest capex
• 325 ktpa 2 new DRI kilns at Vanderbijlpark by
  1H/06 (R432m)
• 660 ktpa efficiency improvements by 2H/06
• Utilise opportunities to increase throughput by
  further 1Mtpa with capital expenditure
• Expand sinter capacity at Vanderbijlpark by 2H/06
  (R460m)
• 445 ktpa Blast furnace D reline at
  Vanderbijlpark by 2H/06
• Additional DRI kilns at Vanderbijlpark (R600m)
• 355 ktpa Blast furnace C reline at
  Vanderbijlpark by 2009
• Rationalisation of other facilities to follow

33
Operating Cost HRC
HRC operating cost US/t FOB Q1/04
500
450
400
Vanderbijlpark US/t 256
350
Saldanha US/t 247
300
250
200
150
100
50
0
International HRC producers
Source Metal Bulletin Research
34
Operating Cost Billet
Billet operating cost US/t FOB Q1/04
500
450
400
350
Newcastle US/t 228
300
250
200
150
100
50
0
International billet producers
Source Metal Bulletin Research
35
Cost Reduction Strategy

• To maintain our position in the lowest cost
  quartile
• Initiatives aimed at 4358 US/t HRC/billet cash
  cost reduction by 2007
• 23 31 US/t from operating efficiency
  improvements
• 13 20 US/t from raw materials procurement
  initiatives
• 4 US/t from increased labour productivity
• 3 US/t from Newcastle PCI project

36
DTI Developmental Pricing

• Progress
• All price comparison data supplied
• Cost benchmarking data analysed. Discussion with
  the DTI
• Developmental pricing principles
• Price rebate structure in place to support
  downstream industry (R450mpa)
• Value added steel manufactured product exports
• Value added steel manufactured product import
  replacement
• Domestic price parity to be inline with domestic
  prices elsewhere in world to ensure local
  competitiveness on an equal base with
  manufacturers globally
• Base prices for all steel commodities to reflect
  market trends, while all other extras in the
  price composition to be cost market driven

37
Mittal Steel

• December 2004 LNM Holdings and Ispat
  International merge to form Mittal Steel Company
  NV
• Listed on NYSE Euronext Amsterdam
• Merger creates the worlds most global steel
  company
• 14 operations on four continents, 45
  nationalities, 165 000 employees
• Forthcoming acquisition of US-based International
  Steel Group will create worlds largest steel
  company
• 64 Mtpa capacity

Shaping the future of steel
38
Mittal Steel

• Renamed company has developed a new corporate
  identity
• Create a globally admired brand
• Single, universal identity for the group
• All subsidiary companies will be rebranded
  renamed Mittal Steel, but
  differentiated by location

The new name for steel
39
Name Change

• Ispat Iscor to be renamed Mittal Steel South
  Africa Limited subject to regulatory and
  shareholder approval
• Commence trade under new name before end March
  2005
• New ISIN ZAE000064044
• New JSE share code MLA

Member of the worlds most global largest steel
company
40
Outlook for Q1 2005

• Business environment to remain optimistic
• Strong steel demand in local market to continue
• Local prices to be slightly lower due to price
  adjustment announced
• Strong Rand to affect export earnings
• Volumes in line with previous quarter
• Earnings
• To remain strong, in line with Q4/04, though
  impacted slightly by lower domestic prices

Stable outlook
41
Facts in Summary

• Planned environmental spend of R964m
• All operations ISO 14001 certified
• Culture of cost control well entrenched in
  organisation
• Direct rebates of R450m for promoting secondary
  exports import substitutions
• Contribution of R45m to SAISI to promote exports
• R15m towards recycling through Collect-a-Can
• R4.5bn contribution to state treasury
• US1.2bn gross export revenue
• ABE procurement of R1bn

42
a n n u a l r e s u l t s
f o r t h e 1 2 m o n t h s e n d e d
d e c e m b e r 2 0 0 4
(formerly Iscor Limited) A member of Mittal Steel
Company