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Analyst Meeting

PT Krakatau Steel (Persero) Tbk.

KANTOR PUSAT

Jl. Industri No. 5 P.O. Box 14 Cilegon, Banten 42435 Telepon : (+62 254) 392159, 392003 (Hunting)

Faksimili : (+62 254) 372246

KANTOR JAKARTA

Gedung Krakatau Steel, Lantai 4 Jl. Jend. Gatot Subroto Kav. 54 Jakarta Selatan 12950

Telepon : (+62 21) 5221255 (Hunting)

Faksimili : (+62 21) 5200876, 5204208, 5200793

PABRIK

Cilegon – Cigading Plant Site, Banten 42435 Website : www.krakatausteel.com

15 March 2012

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Disclaimer

This document has been prepared by PT Krakatau Steel (Persero) Tbk. (“Krakatau Steel” or the “Company”) and may not be taken away, reproduced or redistributed, in whole or in part, to any other person without the prior written consent of the Company.

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The information in this document is given in confidence and reproduction of this document, in whole or in part, or disclosure of any of its contents, without prior consent of the Company, is prohibited. This document should be read in its entirety. This document remains the property of the Company and on request must be returned and any copies destroyed.

This document is for information and convenient reference and does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of the Company nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This document does not constitute a recommendation regarding the securities of the Company and should not be treated as giving investment advice. The information in this document is subject to verification, completion and change without notice and the Company is not under any obligation to update or keep current the information contained herein. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company as to the accuracy, completeness or fairness of the information or opinions contained in this document. The Company does not accept any liability whatsoever for any loss however arising from any use of this document or its contents or otherwise arising in connection therewith.

Certain statements in this document may constitute “forward-looking statements.” These statements reflect the Company’s expectations and are subject to risks and uncertainties that may cause actual results to differ materially and may adversely affect the outcome and financial effects of the plans described herein. You are cautioned not to rely on such forward-looking statements. The Company disclaims any obligation to update their view of such risks and uncertainties or to publicly announce the result of any revisions to the forward-looking statements made herein, except where they would be required to do so under applicable law.

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1. Overview

2. 2011 Results

3. Strategic Projects

4. Indonesian Steel Market

Agenda

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SECTION 1

OVERVIEW

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Unit FY2010 FY2011 Chg (%)

Highlights

Source: Company

Revenue 14,940 17,915 19.9

Sales volume Million tons 1.914 2.068 8.0

Production (HRC) Million tons 1.504 1.761 17.1

EPS 81.2 64.8 20.1 Rp/share

Net profit

EBITDA

Rp bn

1,061 1,023 3.6

1,781 1,152 35.3

Cash

Net debt

4,194 3,594 14.3

2,039 3,718 82.4

Equity 9,426 10,355 9.9

Assets 17,584 21.512 22.3

Cost of revenues 12,672 16,317 28.8

Average selling price (HRC) Rp/kg 6,938 7,555 8.9

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Iron ore pellets prices increased 41.5% Year-on-

Year (YoY), resulting in higher cost of revenues

by 28.8% YoY. Uncertainties arising from the

pricing of iron ore pellets, which is conducted on

a quarterly basis, have continued to put pressure

on the company’s margins.

Key Issues

Iron Ore Pellets and Gas Prices

Net revenue in FY 2011 was Rp 17.9 trillion, up 19.9% YoY as average selling price of HRC rose 8.9% YoY

and steel sales volume grew 8.0% YoY, respectively.

Krakatau Steel completed the revitalization of the Hot Strip Mill in April 2011. The Hot Strip Mill resumed

production in April 2011 after passing the performance test and is currently working at full production

capacity of 2.4 million tons/year. Furthermore, the revitalization of the Direct Reduction Plant and the Slab

Steel Plant has reached 96.7% and 82.1%, respectively, as of February 2012.

The plant construction of Krakatau-POSCO has reached 13.4% as of February 2012 and is scheduled for

completion in December 2013.

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SECTION 2

2011 RESULTS

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Financial results

Description FY 2010 FY 2011 Change (%)

Income Statement

Net Revenues 14,940 17,915 19.9

Cost of Revenues 12,672 16,317 28.8

Gross Profit 2,269 1,599 -29.5

Operating Profit 1,027 359 -65.1

EBITDA 1,781 1,152 -35.3

Net Income 1,061 1,023 -3.6

Earnings per Share 81 65 -20.1

Balance Sheet

Current Assets 12,288 13,213 7.5

Total Assets 17,584 21,512 22.3

Current Liabilities 6,931 9,205 32.8

Total Liabilities 8,159 11,157 36.7

Equity 9,426 10,355 9.9

In billions of rupiah, except for earnings per share

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Capacity Utilization

Operating results

Production

Production

Product FY 2010 FY 2011 Change (%)

Sponge Iron 1,274 1,228 -3.6

Slab Steel 1,084 1,014 -6.5

Hot Rolled Coil 1,504 1,761 17.1

Cold Rolled Coil 415 414 -0.2

Wire Rod 201 238 18.4

Steel Bar 114 121 5.9

Steel Section 76 81 7.7

ERW & Spiral Pipes 56 75 34.1

In thousands of tpy

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Marketing results

Sales Volume Average HRC Price (1)

(1) Currency conversions based on average exchange rates in each respective period

Sales Volume

Hot Rolled Coil 958,041 1,053,784 10.0

Cold Rolled Coil 421,508 405,435 -3.8

Wire Rod 201,318 227,399 13.0

Steel Bar 174,601 186,421 6.8

Steel Section 98,360 100,008 1.7

ERW & Spiral Pipes 60,304 94,531 56.8

Total 1,914,132 2,067,578 8.0

Product FY 2010 FY 2011 Change (%)

Tons

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SECTION 3

STRATEGIC PROJECTS

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Progress of strategic projects

No. Project Status Progress 1. Revitalization of Existing Production

Facilities

a. Hot Strip Mill (HSM) - Work is conducted by Pomini, Tenova, and Consortium SMS

Demag AG, Siemens AG, Siemens Indonesia, Lykmas Jaya.

100.0% - The revitalization project was completed in May 2011.

- Production capacity increases to 2.4 mtpy from 2.0 mtpy.

b. Direct Reduction Plant (DRP)

- Work is conducted by HYL Technologiest S.A de C.V,

Krakatau Engineering, and Honeywell Indonesia. 96.7%, completion in

March 2012 - Activities include instrument control, pipe installation, and civil

works. Shipment of instruments started in October 2011.

c. Slab Steel Plant (SSP)

- Work is conducted by Consortium Siemens VAI and PT

Weltes Energi Nusantara. 82.1%, completion in first

quarter of 2012 - Activities include water treatment plant and dedusting works,

civil works, and installation of oxygen, nitrogen, and natural

gas pipes.

2. Ironmaking Project – Kalsel

(JV KS - Antam)

a. Rotary Kiln - Work is conducted by Krakatau Engineering, Prosys Bangun

Persada, and Outotec. 96.8%, completion in first

quarter of 2012 - Construction of rotary kiln is completed.

b. Power Plant - Work is conducted by BTB (China) 74.1%, completion in first

quarter of 2012 - Installation of boiler.

3. Blast Furnace Project and

Modernisation of Steel Making

Facilities

- Work is conducted by Consortium MCC-CERI. Completion in 2014

- EPS contract was signed on November 15, 2011.

4. Expansion of Hot Strip Mill (2.4 mtpy

to 3.5 mtpy)

- Technical review. Completion in 2014

As of 29 February 2012

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Progress of strategic projects (cont’d)

No. Project Status Progress 5. Infrastructure Development

a. Port development to support

Blast Furnace and JV Krakatau –

POSCO

- Technical review. Completion in 2013

b. Power plant development - Work is conduted by Consortium Imeco and PP. 21.5%, completion in 2013

c. Water supply development phase

I (Krenceng Reservoir capacity

increase)

- Work is conducted by Consortium PT Krakatau Engineering

and PT LMA.

100.0%

- Increase in water reservoir.

6. JV Krakatau POSCO

a. Land preparation - Work is conducted by PT Waskita Karya. 91.8%, completion in 2012

- Land clearing.

b. Plant construction - Work is conducted by Consortium POSCO EC and PT.

Krakatau Engineering.

13.4%, completion in

December 2013

- Pile driving.

As of 29 February 2012

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SECTION 4

INDONESIAN STEEL MARKET

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The ongoing debt crisis in Europe had no significant impact on the Asian steel market but eventually

depressed international prices. Nonetheless, steel demand in Indonesia remained strong last year and is

expected to continue growing in 2012, triggered by the country’s economic growth which is estimated to

reach 6.5% this year. The demand growth is derived mainly from significant expansion of steel related

sectors such as construction and automotive industry. Domestic steel prices have been increasing in the first

quarter of 2012 and are expected to remain strong following the pattern of regional prices.

Most Asian economies are likely to pick up and remain on target for reasonable growth rates, after a sluggish

period at the end of last year. Asian producers will try to build on the positive sentiment and seek higher price

levels in the second quarter.

Key producers in Asia appear to be matching real demand, while the sharp production cuts in China at the

end of last year meant that exports into the region were not excessive. Inventories are below usual and may

be rebuilt in the next few months.

Domestic & regional market overview

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Indonesia’s steel demand

Finished steel consumption in Indonesia

Indonesia’s steel demand drivers

Mining Sector

Local supply shortage

Total finished steel consumption

tonnes (m)

Construction Sector

Transportation &

Manufacturing Sector

Indonesian steel consumption has grown and demand drivers remain strong

Source: SEAISI

Source: SEAISI

47% 56% 46% 54% % of

imports

Domestic

supply gap

53%

Mining, oil & gas development which

requires plates, pipes and tubes

Steel intensive infrastructure, housing

and building construction

Manufacturing sector, especially

automotive and shipbuilding idustries

that use steel as the main material.

Growth in transportation sector will spur

further expansion in these industries

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HRC CRC Wire rod

Mark

et

sh

are

in

In

do

nesia

(2

011

) P

rod

ucti

on

ca

pacit

y

(20

11)

(mtpy) (mtpy) (mtpy)

Source: CRU Strategies, Company

Total demand: 3.6 million tons Total demand: 1.7 million tons Total demand: 0.9 million tons

Leader in market position across major steel products in Indonesia

Leadership in the Indonesian market

41%

Others 52%

24%

Others 76%

25% Others 75%

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Strong and diversified customer base

HRC

CRC

Wire

Automotive

Coil Centers

Drum

Pipes, tube packaging,

tin plates

Home-office appliance

Enamel

Galvanized steel sheet

Automotive

Mechanical

engineering and boiler

pressure vessels

General structure

Oil and gas pipes

Shipbuilding

Diverse end-markets

(1) Direct sales refer to sales made by the company and not through stockists and steel centers

Automotive

Appliances

Bolts and nuts, nails

Construction, welding

Cable wires, wire rope

Spring bed’ electrode

Nails, welding

Our customer and distribution mix provides us with leverage in the market

High proportion of direct sales(1) Low customer concentration

Top 5 customers of steel sales

in 2011

A 6% B

5% C

5%

D 4%

E 4%

Other customers

76%

Proportion of direct sales to

total steel sales in 2011

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Enhance marketing channel and trade barriers

New Market Focus

Shipbuilding projects

Infrastructure projects

– port and bridge

construction

More Services

Increase in product sales to

automotive segment through

IndoJapan steel center (JV with

Nippon Steel Trading, Adyawinsa,

Dwijaya)

Increase in product sales to

automotive and projects segments

through establishment of coil

center in Cikarang

Consignment sales (shipbuilding)

Branded plate

Geographical Scope

Establishment of existing

representative in Batam

Establishment of future

representatives in

Banjarmasin, Balikpapan, and

Makassar to strengthen

presence of KS’ products in

shipbuilding and general

construction segments

Branch & warehouse in

Surabaya

Planned Distribution Hub

Construction of warehousing

railway links in Cikarang and

Surabaya

Construction of warehousing

shipping links in Banjarmasin and

Balikpapan

Enhance marketing channel Trade barriers

Existing barriers

SNI – mandatory standard (HRC, CRC, Rebar,

galvanised sheet, galvalume sheet)

HRC antidumping (China, India

Russia,Taiwan,Thailand, Korea and Malaysia)

Import permit (Regulation of Trade Minister No.

8/2012)

Regulation of Energy and Mineral Resources

Minister No. 7/2012 on Improvement of Additional

Value of Mineral through Mineral Processing and

Purifying Process

Future barriers

CRC antidumping

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