i n v e s t o r p a c k

2

Market Information

JSE Top 40 index position: #22

Free float 41%

Market cap $3.1bn

Daily value traded $6.1m for past 12 months

Annualised turnover 77% of total issued shares

Major shareholders- LNM Group 50.01% (#2 global steel producer)- IDC 8.8%- Institutional 41%

- South Africa 28%- International 13%

Good liquidity and high turnover

3

Company Profile

1928 – Iscor established as parastatal 1989 – Iscor privatised and listed on JSE 1994 – Start of major re-engineering program 2001 – Unbundling of mining division as Kumba Resources 2001 – LNM Holdings N.V. buys initial stake in Iscor 2002 – Iscor enters into BAA with LNM 2004 – LNM/Iscor merger approved; LNM holding goes over 50% 2004 – Name changed to Ispat Iscor Steel industry ranking

- Africa #1 - Global #29

Largest regional steel producer

4

Successful Restructuring History

Major re-engineering 1994-2001- significant headcount reduction (30 000 people)- steel grades down from 302 to 50- inefficient capacity closed (1mtpa)- moved to lowest quartile on global cost curve

Value added products:- Flat 61%- Long 72%

Mining division (Kumba) unbundled November 2001- iron ore mining rights retained to ensure supply at cost

Market value increase* since unbundling (Nov ‘01): 500%

Major value release* Including effect of rights issue in April 2002

5

Production

Operations- 3 integrated steel mills

- 1 steel mini-mill

- surplus coke batteries producing market coke

- captive iron ore (toll-mined by Kumba Resources)

Output- Steel: 6.4 mtpa

- Market Coke: 400 ktpa for ferro-chrome industryLargest regional steel producer

Long 31%

Flat 69%

6

Geographic Location

Overview of operations Flat Products Vanderbijlpark

3.1 Mtpa final product Saldanha

1.3 Mtpa final product

Long Products Newcastle

1.7 Mtpa final product Vereeniging

0.3 Mtpa final product

6.4 Mtpa final product

Market Coke Vanderbijlpark and Newcastle

400 ktpa

Iron ore supply at cost + 3% 6.25 Mtpa iron ore from Sishen

2 Mtpa iron ore from Thabazimbi

VereenigingJohannesburg

NewcastleSishen

Vanderbijlpark

Thabazimbi

Saldanha

Cape Town

Durban

South Africa

Southern African location

Steel plants

Captive iron ore source

7

Geographic Sales

Switch to better paying markets

South Africa

Rest of Africa

Total Africa

Far East

European Union

North America

Middle East

Other

% 0 10 20 30 40 50 60 70 80

1H’04

1H’032H’03

8

Domestic Market

Sound South African economic fundamentals Good prospects for long-term sustainable growth Underlying demand recovery throughout 2004 Other Africa market share growing strongly Domestic margins $100/t > non-African exports

Switch to sustainable growth

’000t Imports %

Co

nsu

mp

tio

n

Steel importsQuarterly consumption

500

700

900

1 100

1 300

1 500

1 700

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 20040%

2%

4%

6%

8%

10%

12%

14%

Imp

ort

s

Consumption trend

9

Domestic Pricing Policy

Domestic prices based on International Parity Principle

Downstream industry support programme ($70m pa) through:- export rebates

- strategic concessions

- long-term contracts (auto industry, packaging)

Competition Commission (Feb 2004) ruling that Iscor pricing policy is fair and reasonable: complainants have lodged appeal

Government has asked for review of downstream support programme

Current import duty – 5%- risk of removal considered low

- SA’s duty amongst lowest in world

International parity pricing model

10

Invoiced Export Prices

Record high prices

Source: Ispat Iscor

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005180

230

280

330

380

430

480

530

580

630Hot rolled coilLow carbon wire rod

Based on order book & expectations

US$/t (c&f)

11

‘mtWSD forecast

Global Steel Demand

Source: World Steel Dynamics

China driving growth in steel demand

+2%

+10%+22%

+21%+22%+2%

+8%

+2% +4% +0%

+3%+6%+6%+4%

-4% +3% +6% +3%+9%

+6%+6%

+7%+3%

+3%+4% +1%

0%

0

200

400

600

800

1 000

1 200

2000 2001 2002 2003 2004 2005 2006 2007 2008

Rest of worldChina

12

‘mt

China – Supply and Demand

China expected to become net exporter

China forecast to become net exporter by 2008

WSD forecast

0

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005 2006 2007 2008

ProductionConsumption

Source: World Steel Dynamics

13

World Steel Consumption Trends

Per capita steel demand entering growth phase

Source: Macquarie Research

World Steel Consumption and GDP Per Capita, 1950-2010

China takes off!

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

5 500

6 000

6 500

7 000

50 55 60 65 70 75 80 85 90 95 100 105 110 115 120 125 130 135 140 145 150 155 160

kg steel/capita

$US

/cap

ita

($

1995

)

20021997

1994 1989

1983 1979

19751971

1970

1973

1961First and second oil prices and subsequent recessions led to massive light-weighting of steel-containing products

Post war expansion to 1970 led to predictions of seemingless endless growth

Collapse of USSR led to steel consumption collapse in Eastern Europe

Asian crisis

1954

2004

2010

Phase 1

Phase 3

Phase 2

1999

14

Global Input Price Trends

Global input prices still under pressure

Based to 100 Based to 100

Coking coal - contract (LHS)Iron ore fines - contract (LHS) Coke (RHS)

Freight rates (RHS)

Scrap (RHS)

Source: Ispat Iscor

90

100

110

120

130

140

150

160

170

Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04

0

100

200

300

400

500

600

700

800

15

Raw Material Integration

Internally

sourced (at cost) Imported

Domestic

supplyagreement

s

Coke 100% --

Coal 8% 37%55%

Scrap 81% - 19%

Iron ore 92% 5%3%

Cost benefit for raw material integration

DRI 98% - 2%

Actual 1H’04 data

16

Key Performance Indicators

2H’031H’03 1H’04

Exchange rate impacting good productivity performance

- percentage 4.30.2 6.1

Number of employees (’000) 12 53913 045 12 072

CI savings (Rm) 30313 464

HRC cash cost - R/t 1 637 1 756 1 686

- US$/t 231221 254

Billet cash cost - R/t 1 5291 535 1 543

- US$/t 217193 231

Percentage value-add exports - flat 44 37 61

- long 7260 72

17

Headline Earnings

Record earnings

Rm 2H’031H’03 1H’04

* After tax

Headline earnings 462 1 143

Comparable operating profit Financing cost - net interest expense

TaxEquity earnings*

Revenue

Minority interest

Comparable earnings

BAA remuneration*Restructuring costs*Power contract settlement*

- in US$m

1 504 1 871 (16)(31)

(492) (608)67 48

9 175 9 312

(3)1

1 007 1 253

(429) (116)

(110)

145 156

2 948(14)

(914)179

1 551

10 544

(4)

2 062

(511)

311

- long-term provision top-up (53)(28) (133)

# Lower discount rate accounts for R100m

#

18

Comparable Headline Earnings Trend

Steel cycle overshadows Rand strength

0

150

300

450

600

750

900

1 050

1 200

0

30

60

90

120

150

180

Rand million US$ million

657

1Q’03

596

2Q’03

352

3Q’03

655

4Q’03 1Q’04

669

2Q’04

1 393

2101 350

1 500 240

79

1Q’03R8.32/$

77

2Q’03R7.73/$

48

3Q’03R7.40/$

97

4Q’03R6.72/$

1Q’04

99

R6.75/$

2Q’04

212

R6.57/$* Average R/US$ spot rate *

19

Key Result Drivers

HRC cash cost per tonne (Rands) -4%

Domestic sales volume +22%

HRC US$ price +40%

Exchange rate +21%

Operating margin* 20% 28%

Positive Negative1H’04 vs 1H’03

* Excluding BAA remuneration (1H’04) & power contract settlement (1H’03)

Strong Rand only negative factor

20

Sensitivity Analysis

Significant gearing to major variables

VariableHeadline

Earnings*Operating

Income*EPS

(SAc)*Change

Domestic sales 127187 29±10%

International steel price 134197 30±$10/tonne

Exchange rate 79 ±10c 116 18

* Based on impact for full six months forecast July-December 2004

21

Financial Ratios

Margins approaching cyclical peak levels

2H’031H’03 1H’04

Revenue/invested capital (times) 1.3 1.3 1.4

Net cash/equity (%) 5.8 0.2 9.7

Return on equity (%) - on comparative basis (%)

18 720 16

2330

Operating margin (%) - on comparative basis (%)

18 820 16

2128

EBITDA margin (%) - on comparative basis (%)

23 1325 22

2633

22

Distribution to Shareholders

In view of our strong cash flow:

Current distribution policy being reviewed

Capital reduction proposal to be put to shareholders before

end-2004

Programme of capital reduction to be instituted

Current stated capital R14/share

No interim dividend declaration

Surplus capital to be returned to shareholders

23

3-Year Focus

Further quantum reduction in costs

Increase production from current assets by 1mtpa

Focus on value-add projects

Lowest quartile producer (delivered EU cost basis)

Defer South African steel industry consolidation

Join select group of steel companies earning in excess of WACC

24

Outlook for 2004

Positive steel business environment- ongoing global consumption growth

- prices increasing from current levels

- continued strength in domestic demand

Operations- ongoing cost reduction

- increased throughput

Earnings- Q3 up on Q2

Positive outlook

25

Investment Case

Competitive producer- vertically integrated- lowest cost quartile focus- part of major global steel group- naturally protected domestic market

Growth potential- growing, more profitable regional market- sweat current assets for extra 1mtpa- expansion of market coke operations- domestic steel industry consolidation

Gearing to Chinese growth- steel market fortunes dependent on continued Chinese growth- Ispat Iscor revenue directly linked to international steel prices

Competitive low-cost producer

M a r k e t D a t a

27

Steel Equity Performance

Ispat Iscor amongst best performers

Source: Bloomberg

0

500

600

Jun ‘02

Aug ‘02

Oct ‘02

Dec ’02

Feb ‘03

Apr ‘03

Jun ‘03

Aug ‘03

Oct ‘03

Dec ‘03

Feb ‘04

Apr ‘04

Jun ‘04

100

200

300

400China Steel

Gerdau

CSN

POSCO

Severstal

Ispat Iscor

Bluescope

Arcelor

Nucor

US Steel

Aug ‘04

Base to 100, all prices in US$

28

Steel Equity P/E’s (Forward)

Ispat Iscor still attractively valued

Source: Bloomberg, 24 August 2004

0

2

4

6

8

10

12

14

POSCOCST

SEVERSTAL

ISPAT IS

COR

ARCELOR

US STEEL

STEEL DYNAM

ICS

SAIL

INT’L

STEEL

CHINA S

TEEL

GERDAU

NUCORCSN

TISCO

BLUESCOPE S

TEEL

BAOSHAN

THYSSENKRUPP

VOESTALPIN

E

ONESTEEL LI

MIT

ED

29

Steel Equity Price/Book

Ispat Iscor still attractively valued

Source: Bloomberg, 24 August 2004

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

CST

VOESTALPIN

E

ARCELOR

THYSSENKRUPP

POSCO

ONESTEEL

LIM

ITED

ISPAT IS

CORCSN

USIMIN

AS SA

CHINA S

TEEL

SEVERSTAL

STEEL DYNAM

ICS

BAOSHAN

NUCOR

INT’L

STEEL

GERDAU

US STEEL

TISCO

30

Steel Equity Market Capitalisation

Mid-sized market cap

Source: Bloomberg, 24 August 2004

US$m

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

ONESTEEL

LIM

ITED

STEEL

DYNAMIC

S

VOESTALPIN

ECST

TISCO

INTERNATIO

NAL

STEEL

ISPAT IS

COR

USIMIN

AS SA

SEVERSTAL

BLUESCOPE S

TEEL

US STEEL

CSN

GERDAU

NUCOR

CHINA S

TEEL

BAOSHAN

THYSSENKRUPP

ARCELOR

POSCO

e x t r a s l i d e s

32

Relationship with LNM

Iscor’s long-term desire to link-up with a major steel group

Business assistance agreement signed with LNM (Jan ‘02)- remuneration linked to performance - target cost savings (excl. labour + first 1%) R350m to R700m pa - LNM reward: 5-10% Iscor issued shares or cash equivalent

Sustainable savings to June 2004 – R1 326m per annum- cost savings target exceeded by 132%- R613m (value of 25.7m shares) paid to LNM Dec ‘03- R731 (value of 18.9m shares) paid to LNM Aug ’04

BAA expires at end-2004- allowance for renegotiation- approval of minority shareholders required

Value from international tie-up

33

Business Assistance Agreement

BAA payback approximately 1 year

Savings achievedCum %

of shares

Remuneration due

Settled

* Measured from Jul-Dec ’01 base, indexed

Rm pa*% of

max target

Dec ‘03 687 115%

Dec ‘02 644 82%

Number ofshares (m) Rm

Jun ‘03 5.8% 388 613 Dec ‘0358% 25.7

Jun ‘04 731 10.0% 1 326 232% 18.9 Aug ‘04

1 34444.6

Dec ‘04 Further savings expected

(cash)

(cash)

34

BAA Savings Analysis

BAA savings spread over group operations

By Savings Annualised Savings (Rm) %

Total BAA Savings 1 326 100%

Procurement 468 35%

Vanderbijlpark 506 38%

Saldanha 251 19%

Newcastle 378 29%

Efficiencies 858 65%

By Plant

Vereeniging 190 14%

Total BAA Savings 1 326 100%

Annualised Savings (Rm) %

35

Currency Strength

Rand has strengthened 37% against US$ over past 24 months

Rand relatively stronger than currencies of competitor countries

Costs 65% Rand-based

Focus to maintain position on cost curve

3-yr programme - restructuring

- improvement projects

- efficiency programmes

Pro-active initiatives to counter strong Rand

36

Newcastle - pulverised coal injection 1H’05

Vanderbijlpark- Blast Furnace C – throat armour repair

Completed- Blast Furnace D – interim repair 2H’04- Roofer galvanising line* 1H’06

Coke & chemicals- market coke expansion* 2H’06

Thabazimbi - iron ore mine: life expansion project*

Significant spend for value-add

Planned Completion

* Still to be approved

Capital Projects

37

Environmental

Environmental master plans approved

All steel operations ISO 14001 certified

Major environmental projects in progress- Vanderbijlpark

- main water treatment plant

- coke oven gas & water cleaning

- Newcastle

- reverse osmosis water treatment plant

Focus on environmental compliance

38

Cash Flow

Strong cash flow

Rm 2H’031H’03 1H’04

BAA remuneration (613)

Capex (499)(780) (405)

Asset sales 46 41 13

Working capital (292)(48) (1 069)

Finance cost (9) (96) (22)

Tax (1 032)(55) (273)

Dividends (446) (446) (334)

Net cash flow (823)918 1 362

Cash generated by operations 2 022 2 302 3 452

39

Capital Expenditure

Increased value-add and environmental spend

Rm 1H’03 1H’042H’03 2H’04Fcast

Replacement 300 452 267 352

Environmental 75 109 56 130

Total 499 780 405 860

Depreciation 469 451 478 519

Value adding 124 219 82 378

40

Sales Volumes

Strong domestic sales growth

’000t

Vanderbijlpark Saldanha Long products

2H’031H’03 1H’04

Total

2H’031H’03 1H’04 2H’031H’03 1H’040

500

1 000

1 500

2 000

2 500

3 000

3 500

588588 722722

787787 792792395395 438438

500500 443443

460460 496496

1 5091 664

565 622

960 939134134

9898 114114

150150

7272 7070

470470

923923

1 569

176176

350350

548

1141148484

390390

594594

984

1H’03

1 4831 483

1 3191 319

3 034

232232

2H’03

1 6031 603

1 3581 358

3 225

264264

3 101

1H’04

1 2101 210

1 6011 601

290290

* Duferco Steel Processing – re-roller mainly for export

Domestic DSP*Export

Domestic other

41

Liquid Steel Production

Production affected by Saldanha breakout

’000t

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Vanderbijlpark Saldanha Long products

2H’031H’03 1H’04

Total

2H’031H’03 1H’04 2H’031H’03 1H’04 2H’031H’03 1H’04

1 811 1 870

606 645

1 073 1 080

1 829

563

1 085

3 4903 595

3 477

42

Flat Product Prices – Hot Rolled Coil

Geographical divergence

Source: CRU

US$/t c&f

US MidwestGermany

150

250

350

450

550

650

750

850

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Far East

43

Long Product Prices - Wire Rod

Geographical divergence

Source: CRU

US$/t c&f

150

250

350

450

550

650

750

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

US MidwestGermanyFar East

44

Ispat Iscor Cash Cost Base

Cash cost breakdown

Iron ore7%

Coal : Local7%

Coal : Import7%

Scrap/DRI/Pellets6%

Other raw material4%

Alloys & coating9%

Refractories4%Transport

10%

Spares & repairs

8%

Electricity, gas & petroleum

10%

Consumables4%

Services3%

Labour15%

General6%

Total production cost base H1 2004: R6.5 billion

45

Raw Material and Energy Impact

Iscor’s cost push relatively mutedSource: World Steel Dynamics

Coking coal Coke Iron ore/sinter/pellets Pig iron Scrap DRI Energy

US Integrated plant – with coke

+$81/ton

US Integrated plant – without coke

+$135/ton

US Minimill –flat products

+$199/ton

Ispat Iscor

+$40/ton

0

50

100

150

200

250

300

350

Q1 02 Q2 04

$/to

n

0

50

100

150

200

250

300

350

Q1 02 Q2 04

$/to

n

0

50

100

150

200

250

300

350

400

Q1 02 Q2 04

$/to

n

0

50

100

150

200

250

300

350

Q3 02 Q2 04

$/to

n