Three quarters of 2012

Performance Roadshow

Warsaw, December 2012

Automotive Market Performance (1)

Source: LMC Automotive Westerrn Europe

In September year-to-date sales were 7,7% below 2011 level. However, production which

is the main driver of company sales, dropped by 7,6% in the same period. But the market

shows much better balance since 2009. As of the end of October ,YTD sales were down

by 7,5% and production by 8,8%.

Automotive Market Performance (2)

(in thousands of units)

Three quarters of 2012 Three quarters of 2011 Change in %

Cars sold (W. Europe) 9 140 9 905 -7,7%

Cars manufactured (W. Europe) 8 848 9 577 -7,6%

Difference 292 328

ACE Auto parts 23 566 22 632 +4,1%

Year-to-date production of cars in Western Europe was some lower than sales

-292 thousand cars and this difference shrinked in comparison with

Q1-Q3 2011(328 thousand cars).

4,1% increase in number of units produced by the Group automotive

companies significantly contrasts with 7,6% decline of new cars production in

Western Europe.

The main drivers of ACE volume sales are: the new product range in the alu

segment and still high demand for nodular iron products due to our strong market

position (but declining in Q3 due to market slowdown).

Source: LMC Automotive, ACE

Company Sales Volume (1)

In Q3 our company automotive volume sales were driven by new alu projects (+10,7%) and lower demand for nodular iron products (-2,6%), and were again above the market (+0,4% ACE vs. -7,6% market).

Source: ACE data and

LMC Automotive for Western

European market

Company Sales Volume (2)

• Total ACE volume increased by 3,3%

• 3,2% volume increase allocated in nodular iron (Spain) mainly due to

increasing demand in the supply chain, and 7,1% volume growth in

aluminium (Poland). But new projects (TMC, front caliper and iron machining)

grew by over 36% and their share in total volume sales will be further

increasing in 2012 and following years.

• Grey iron – the non automotive business - showed nearly 10,5% decline in

volume sales. However in weight volumes were some lower by 6,9%.

Sales volumes in million pieces Three quarters of 2012 Three quarters of 2011

Nodular iron castings 17,9 17,3

Grey iron castings 1,3 1,4

Aluminium castings

New family products

4,0

1,7

4,0

1,3

Total products sold 24,8 24,0

Company Sales Value (1)

Over 1% increase of turnover for the corresponding periods. There is a small difference between value and volume growth on average basis due to compensating effects.

Three quarters of

2012

% Three quarters of

2011

%

Sales of products 73 762 96,7% 72 886 96,6%

Sales of goods and materials 2 523 3,3% 2 548 3,4%

Total sales revenues 76 285 100% 75 434 100%

Company Sales Value (2)

Three quarters of

2012

% Three quarters of

2011

%

Sales of nodular iron castings 39 012 52,9% 36 370 49,9%

Sales of grey iron castings 10 198 13,8% 11 019 15,1%

Sales of aluminium castings

New family products

17 918

6 635

24,3%

9,0%

19 978

5 519

27,4%

7,6%

Total sales of products 73 762 100% 72 886 100%

•However, breakdown by segments: year-on-year basis sales increased significantly only

in one automotive plant – in Spain – while sales in Poland and Czech declined.

•The growth of 7,3% was recorded in the nodular iron segment while the aluminium

segment sales declined by 3,7%. In the nodular iron segment revenues growth was driven

by higher volumes, generally stable raw material prices and higher energy surcharged to

the customers.

While the aluminium segment was impacted by significantly lower mix, including % of

machined parts, higher share of TMCs but also by significantly lower prices of alu.

Turnover from new family products grew by over 20,2%.

•In Feramo the revenues value declined by 7,5% but substantially improved in Q3 2012.

Iron Scrap Market

Steel scrap prices were on average around 26 EURO/t lower in Q1-Q3 2012

than in 2011 (5,9% decline) adversly impacting sales value but having positive

impact on profits. Year-on-year difference in Q3 was even higher – 38,7 EURO/t

( 8,6% decline). In the following months scrap prices should remain stable or

slightly decline.

Source: CAEF

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Scrap prices CAEF index

Aluminium Market

Aluminium prices in Q1-Q3 were on average on a declining path comparing to

the end of 2011. And y-on-y aluminium prices declined even stronger also

impacting negatively revenues value.

ACE Consolidated Performance (1)

Three quarters of

2012

Three quarters of

2011

Change in %

Revenues from Sales 76 285 75 434 1,1%

Gross Profit 13 551 14 360 -5,6%

Operating Profit 2 700 3 802 -29,0%

EBITDA 6 327 8 179 -22,6%

Net Profit 1 785 1 627 9,7%

Comparison of consolidated performance on y-to-y basis shows slight improvement on sales level and deterioration of operating margins due to three main reasons: 10% decline of machined parts, drop of grey iron sales by 6,9% and restart of the third line in Spain producing temporary inefficiencies.

The impact of the financial items in Q3 2012 was less negative mostly due to strengthening of PLN and CZK versus euro, improving bottom line performance. Revaluation of outstanding balances reflects only a fair valuation and not necessarily cash outflows. Revaluation of future contracts had no impact on P&L and was done through the Equity.

ACE Consolidated Performance (2)

Comparing with the corresponding quarter, sales value increased only by 1,3% following 0,7% increase of volumes q-on-q (0,4% increase of volumes for automotive companies). This is a direct consequence of lower car production in Q3 2012 vs. Q3 2011 (9,9% decrease in Western Europe).

Thanks to reduction of depreciation (ending of expected useful life of machining assetes) Q3 showed better profitability on gross profit level. And on the bottom line level due to FX financial items and CIT lower expenses. But operating profit was lower due to higher G&A costs driven by EUR 500k of one-off expences.

Q3 of 2012 Q3 of 2011 Change in %

Q3 ’12/Q3 ‘11

Revenues from Sales 23 060 _____ 22 760 _____ 1,3%

Gross Profit 4 167 18,1% 4 039 17,7% 3,2%

Operating Profit 605 2,6% 1 051 4,6% -42,4%

EBITDA 1 694 7,3% 2 481 10,9% -31,7%

Net Profit 655 2,8% -125 -0,5% ~

ACE Consolidated Performance (3) Profit Drivers for automotive companies

• Higher Volumes comparing with Q1-Q3 2011. The growth results from growing

demand stimulated by export of cars, recovery of inventories and a strong market

position. The growth was allocated mainly in the nodular iron business and the new

family of aluminium products.

• Sales mix in aluminium, declined in 2012 versus 2011 with machining declining by

10% in volume terms. New growing projects mostly do not include machining. Also

the mix in new family products becomes on average less profitable despite growing

volumes.

• Oppositely, y-on-y depreciation of Polish zloty in 2012 had a positive impact on

profitability - on operating levels (around EUR 500k).

• On top of this, PLN and CZK also slightly apreciated since December 2011 affecting

positively our P&L. Negative value of all hedging contracts in the Balance Sheet as

of the end of September 2012 was EUR 192k.

ACE Consolidated Performance (4) Impact of non automotive company (Feramo)

• Operating result: with above 10,2m euro of Q1-Q3 2012 sales is a significant revenues generator in the Group (14% of consolidated sales). Around 10% decline in terms of volume units and 7% decline in weight versus the same period of 2011. Despite sharp improvement of the sales level in Q3 (+5,7% in volume terms and 12,8% in weight) the company in Q1-Q3 was operating below a break-even level mainly due to a very weaker results in previous quarters of 2012.

• The explanation of the sharp growth of sales in Q3 comes from expected improvement of demand for products. But still the level of sales in Q3 was able to reverse negative profitability on GP level only, with negative OP profit. Further increase of margins requires even higher sales, improvements in productivity and lower production costs to come in 2013.

• Feramo is in a great deal protected against increases of raw material prices and has a CAEF index based surcharge agreements in place.

ACE Consolidated Performance (5)

The operating generation of cash in Q1-Q3 2012 was positive at around EUR 1 518k(improved in a great deal from H1) but still limited mainly as a result of growing working capital driven by higher volumes and production activity after summer holidays.

An impact of investing activities of EUR 9,2m reflected CEE capex. Financial activities took out EUR 1,3m of cash mainly due to repayment of the bank loan and dividend distribution, eased by EUR 3m of additional debt.

The cash position at the end of the period was still very positive, and debt structure very safe. In the end of September 2012 cash position reached EUR 12,3m. Net debt at the end of the period was EUR 9,1m.

in € mln

Source: ACE data

Outlook 2012 (1)

In the end of September 2012 the full year sales forecast went down to -7,7%. In October 2012 LMC Automotive downgraded its full year 2012 sales forecast to -8,0%. At the same time 2013 forecast went down to -2,7%.

In the left chart below we can see the trend of this forecast month by month

The latest PwC Autofacts estimates for 2012 production of new cars to show 7,5% decline (-4,4% including CEE) in comparison with the previous year, also downgrading previous forecast. For 2013 PwC forecasts slight recovery of production in a range of 0,5% for EU and 2,6% including CEE.

Source: LMC Automotive

-9.00%

-8.00%

-7.00%

-6.00%

-5.00%

-4.00%

-3.00%

-2.00%

-1.00%

0.00%Aug '11 Sep '11 Oct '11 Nov 11 Dec '11 Jan '12 Feb '12 Mar '12 Apr '12 May '12 Jun '12 Jul '12 Aug '12 Sep '12 Oct '12

2011

2012

2013

Outlook 2012 (2)

Source: PwC Autofacts, October 2012

PwC Autofacts in its latest report from October 2012 forecasts a decline of

production in the EU countries but still growth in the CEE region.

ACE now produces parts also for its customers operating on markets outside

Europe potentially offseting a gap in local demand.

A slight rebound of the European market is expected since 2013 and shrarper

growth should come in the following years.

Outlook 2012 (3)

The main driver of the current year results will be volume, highly depending on European automotive market performance:

• SALES: Despite lowering of the automotive market our prospects show some volume growth of customer’s orders in 2012 with some potential impact on ACE’s operations:

– Higher volumes in exchange for lower margins (-)

– Stronger market performance in the first half of 2012 than in the second (+)

– Declining % and volumes of machining with a profitable machining margin (-)

– Search for new projects to fulfill current capacity in grey iron and machining (+)

– Potential for volume and market share growth in future (+)

– Growing exports to markets outside Europe (including also components) (+)

– Higher capacity of the alu casting division since the beginning of 2010 (front caliper) (+)

Expectations for full 2012 stated in the Strategy 2012-2015 assume ACE Group sales volume growth outperforming the market. However, Q4 shows some more weakness stressed by inventory reductions in the production chain.

• COSTS: Short term profitability depends on iron scrap prices movements but since improvements of some contracts were achieved the impact is somehow limited. PLN /Euro exchange rate has still impact on FX.

• FINANCIAL ITEMS The impact of valuation of active forward contracts is not longer visible in the P&L account but in the BS. Financial items might be impacted (positively or negatively) by FX effect linked with revaluation of some balance sheet items especially visible on the bottom line.

• CASH POSITION Higher sales should result in further cash generation. However some decrease of the cash in expected due to the CEE investment program and upgrade of Fuchosa efficiency.

Near Future Plans

• FERAMO GROWTH: Investment programme to increase nodular iron capacity by over 50%. Revised capex of up to EUR 9 m allowing to increase volume from 15k to 35k tones and triple revenues from sales in 4 years.

The advancement of the project is one month behind the schedule and some delays which accrued in April should not have impact on the final deadline.

• Nodular Iron : Full capacity of two lines in 2011. From beginning of 2012 the third line had been in operation to meet the demand but was creating some inefficieces. Modernisation of the second line was successfully completed in August. The upgraded line was operational from the end of September. But its improved productivity impact will be visible in 2013 when many projects will be transfered to the new line.

• Aluminium GROWTH: Front calipers and iron machining already started in 2009 with a massive production commenced in January 2010 and jointly with TMC are gaining important share in the alu segment. However products mix can fluctuate impacting profitability. Important commercial challenges from the customer side to be decided.

• New iron products – to utilise a new capacity at Feramo the company already signed some commercial agreements with new customers to start production in Jan 2013. Fuchosa transfers nodular iron technology to Feramo and will support the company at R&D level

• Grey Iron: Saturate current capacity and decrease production inefficiences.

• Acquisitions – Some new targets under consideration.