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Company presentation – November 2009The ANDRITZ GROUP

2 Company presentation – November 2009

Company presentation

Business profile and results Q1-Q3 2009

Major developments in Q1-Q3 2009 and market expectations by business area

Long-term goals

Summary

Contents


~5% ofGroup’sorder intake.

Systems for production of animal feed and wood/biofuel pellets.

~10% of Group’sorder intake.

Systems for mechanical and thermal solid/liquid separation.


Systems for production and processing of stainless steel and carbon steel strips.


Systems for production of all types of pulp and certain paper grades.


Electro-mechanical equipment for hydro-power plants; pumps.

The ANDRITZ GROUPA world market leader in most business areas


Strong growth through organic expansion and acquisitionsCAGR 1999-2008: +21% p.a.

656937

3,6103,283

2,710

1,7441,481

1,2251,1101,319

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

CAGR 1999-2008: +21% p. a.

(thereof +13% p. a. organic growth)

Sales of the ANDRITZ GROUP (MEUR)

1990 Sprout-Bauer1992 Durametal1994 Kone Wood1998 Kvaerner Hymac1999 Winberg2000 Ahlstrom Machinery2000 Lamb Baling Line2000 Voith Andritz Tissue LLC (JV)2002 ABB Drying2003 IDEAS Simulation 2003 Acutest Oy2003 Fiedler2004 EMS (JV)2005 Cybermetrics2005 Universal Dynamics Group2006 Küsters2006 Pilão2007 Bachofen + Meier2007 Sindus2008 Kufferath2009 Rollteck

PULP & PAPER

1995 Jesma-Matador2000 UMT2005 Chemes Strojarne

FEED & BIOFUEL

2006 VA TECH HYDRO2007 Tigép2008 GE Hydro business2008 GEHI (JV)

HYDRO

1992 TCW Engineering1996 Guinard2002 3SYS2004 Bird Machine2004 NETZSCH Filtration2004 Fluid Bed Systems of

VA TECH WABAG2005 Lenser Filtration2006 CONTEC Decanter

ENVIRONMENT & PROCESS

1997 Sundwig1998 Thermtec2000 Kohler2002 SELAS SAS

Furnace Div.2004 Kaiser2005 Lynson2008 Maerz

METALS


1999 2008

Long-term sales developmentHYDRO and PULP & PAPER as main growth drivers

3,610 MEUR

656 MEUR

+450

%

All business areas with CAGR >10% during the last ten years.

Strongest growth came from HYDRO business area.

1999 2008

1999-2008: + 2,954 MEUR sales, thereof contribution from . . .

HYDRO:40%

PULP & PAPER:34%

METALS:14%

ENVIRONMENT &PROCESS:

9%

FEED & BIOFUEL:3%

Share of sales by business area

8%11%

20%56%

5%

1999

+10%4%FEED & BIOFUEL+16%10%ENVIRONMENT & ROCESS

+17%16%METALS+17%37%PULP & PAPER

+51%33%HYDRO

CAGR2008

Sales of the ANDRITZ Group:


64%71%

12%

28%7%9%7%

1999 2008

Europe North America

South America China

Asia (excl. China) Others

~3,000

~13,700

1999 2008

Global presenceStrong base in Europe, strong growth in emerging markets

Europe

NorthAmerica

SouthAmerica

China

Asia(excl.

China)

Others

Employees 1999-2008:strongest growth in emerging markets

Employees by region 1999 vs. 2008: stable base in Europe

+ ~3

50%

Employees 1999-2008more than tripled

8178 +1701999:

2008:

9976 +9671999:

2008:

301,183 +1,1531999:

2008:

2946 +9441999:

2008:

8381,617 +7791999:

2008:

2,1348,807 +6,6731999:

2008:

1% 1%


Balance sheet structure

Total assets increased to 3,216 MEUR as of Sept. 30, 2009 (Dec. 31, 2008: 3,086 MEUR).

Substantial increase of gross cash position to 1,056 MEUR as of Sept. 30, 2009 (822 MEUR as ofDec. 31, 2008); net liquidity increased to 660 MEUR as of Sept. 30, 2009 (Dec. 31, 2008: 409 MEUR).

Low net working capital, at -157 MEUR, as of Sept. 30, 2009 (Dec. 31, 2008: 23 MEUR).

Equity ratio amounted to 18.7% as of Sept. 30, 2009 (18.7% as of end of 2008).

Strong increasing cash position

514Provisions220Goodwill

3,216Total shareholders’ equity and liabilities3,216Total assets

Balance sheet as of Sept. 30, 2009

939419

354

1,056450

551

1,569230

739

Other current liabilitiesThereof: > Trade accounts payable

> Billings in excess of cost and earningsof projects under construction

Other current assetsThereof: > Trade accounts receivable

> Cost and earnings of projects under constructionin excess of billings

108Other non-current liabilitiesCash and cash equivalents and marketable securities

424377

Financial liabilities,thereof bondsInventories

56635

Shareholders’ equity,minoritiesOther non-current assets


Q1-Q3 2009 and Q3 2009 results at a glance

6.5-6.56.0-6.44.4%EBITA margin (incl. restructuring exp.)

246.8-21.0%57.645.5-22.1%162.1126.3MEUREBITA (excl. restructuring expenses)

233.2-21.0%57.645.5-37.1%162.1102.0MEUREBITA (incl. restructuring expenses)

-0.4%-

--

-22.8%+23.8%-23.7%-19.9%

+533.3%-35.2%

-17.7%-14.9%-1.0%+9.1%

+/-

-0.4%-

--

+21.8%+11.3%-42.3%-40.0%

+1,000.0%-44.0%

-25.3%-8.2%-1.0%

-11.9%+/-

13,1763.7

5.46.3

51.4344.163.593.76.6

87.1

146.72,330.24,514.52,554.9

Q1-Q3 2009

13,70713,22513,17613,225-Employees (as of end of period)

6.1

6.57.9

14.5183.038.055.71.5

54.2

69.9888.9

4,558.1771.7

Q32008

%

%

%

MEUR

MEUR

MEUR

MEUR

MEUR

MEUR

MEUR

MEUR

MEUR

MEUR

Unit

4.6

6.07.6

11.2226.529.044.69.5

35.1

57.5756.1

4,514.5842.2

Q32009

6.1

6.87.7

69.7255.0147.0210.5

-8.1218.5

278.23,609.84,277.43,705.3

2008

0.6Financial result

6.1EBIT margin

6.4EBITA margin (excl. restructuring exp.)

7.7EBITDA margin42.2Capital expenditure

309.2Cash flow from operating activities110.0Net income (incl. minority interests)156.2EBT

155.6EBIT

196.5EBITDA2,538.9Sales4,558.1Order backlog (as of end of period)

2,900.4Order intake

Q1-Q3 2008KEY FIGURES


Q1:790.1

Q1:750.9

Q2:899.1

Q2:784.0

Q3: 756.1

Q3: 888.9

Group sales

Group sales (MEUR)Q1-Q3 2008 Q1-Q3 2009

2,538.92,330.2 2,330.2

Q1-Q3 2009

HYDRO: +24% vs. Q1-Q3 2008

PULP & PAPER: -32% vs. Q1-Q3 2008

METALS: -15% vs. Q1-Q3 2008

ENVIRONMENT & PROCESS: -5% vs. Q1-Q3 2008FEED & BIOFUEL: -14% vs. Q1-Q3 2009

Good development in HYDRO,decrease in all other business areas

Q1-Q3: -8%

Q2: -13%

Q1: +5%

Q3: -15%


40 MEUR

14 MEUR 20 MEUR 12 MEUR

24 MEUR 10 MEUR

Group restructuring to cope with weak global economyMajor cost savings expected for 2010

Restructuring measures mainly in PULP & PAPER; selective adjustments in the other business areas.

Restructuring expenses Q4 2008:~14 MEUR

Total expected cost savings p.a.*:~20 MEUR

Thereof cost savings in 2009:~12 MEUR

Restructuring expenses Q2 2009:~24 MEUR



Restructuring expenses ´08 + ´09:~38 MEUR



* vs. 2008 cost level


Q2:12.8

Earnings

EBITA margins of HYDRO, METALS and ENVIRONMENT & PROCESS in Q3 2009 increased compared to Q3 2008.

Weak development in PULP & PAPER due to continued low business volume in the capital business.

FEED & BIOFUEL substantially down due to higher costs as a result of increased outsourcing.

Solid profitability in Q3 2009 despite decline in sales

Q1-Q3 2008 Q1-Q3 2009 (excl. restructuring)

EBITA (MEUR) EBITA margin

6.4%5.4%

162.1

126.3

Q1-Q3 2009 (incl. restructuring)

102.0

Q1:45.5

Q2:59.0

Q3:57.6

Q1:43.7

Q2:37.1

Q3:45.5

Q1:43.7

Q3:45.5

4.4%

Q3 2008 Q3 2009

6.5% 6.0%57.645.5

Q1-Q3:-22%

Q1-Q3: -37%


Q1:981.4

Q1:1,195.7

Q2:933.0 Q2:

731.3

Q3:842.2

Q3: 771.7

Order intake

Group order intake (MEUR)Q1-Q3 2008 Q1-Q3 2009

2,900.42,554.9 2,554.9

Q1-Q3 2009

HYDRO: +36% vs. Q1-Q3 2008

PULP & PAPER: -37% vs. Q1-Q3 2008

METALS: -51% vs. Q1-Q3 2008ENVIRONMENT & PROCESS: -15% vs. Q1-Q3 2008FEED & BIOFUEL: -37% vs. Q1-Q3 2008

Strong order intake in HYDRO, down in all other business areas

Q1: -18%

Q1-Q3: -12%

Q2: -22%

Q3: +9%


Order intake

-32%116172METALS

Order intake (MEUR) Q3 2009 vs. Q3 2008 by business area

-43%

+5%

+24%

+33%

+9%+/-

2137FEED & BIOFUEL

7976ENVIRONMENT & PROCESS

302244PULP & PAPER

324243HYDRO

842772ANDRITZ GROUPQ3 2009Q3 2008

Group order intake Q4 2007-Q3 2009 (MEUR)

1098 1196933

772 805981

731 842

Q42007

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Quarterly order intake stabilized


Order intake and sales by regionWell balanced geographical exposure

Order intake by regionQ1-Q3 2009 (Q1-Q3 2008) in %

Europe remains the Group’s most important market in terms of sales and order intake.

Emerging markets account for more than 50% of order intake.

Sales by regionQ1-Q3 2009 (Q1-Q3 2008) in %


904 1,0541,439

1,696

3,3973,843

4,5584,277

4,515

HYDRO: +20% vs. Q1-Q3 2008

Order backlog

Group order backlog as of end of period (MEUR)

PULP & PAPER: -33% vs. Q1-Q3 2008

METALS: -19% vs. Q1-Q3 2008ENVIRONMENT & PROCESS: -14% vs. Q1-Q3 2008FEED & BIOFUEL: -35% vs. Q1-Q3 2008

2002 2003 2004 2005 2006 2007 Q1-Q32008

2008 Q1-Q32009

Good in HYDRO, declining in all other business areas


Market: continuing high project activity worldwide with modernization of existing plants concentrated on Europe and North America; new hydropower plant projects mainly focused on emerging markets, especially Asia and South America.

Continuing strong order intake in all divisions, including the pumps and turbo generator businesses.

Sales, order intake, and profitability in Q3 2009 increased compared to reference period of last year.

HYDROContinuing good development

8.8-9.09.2-8.28.3%EBITDA margin

+7.1%-

+13.5%

+11.9%+9.3%

+19.6%+33.4%

+/-

+7.1%-

+20.6%

+24.5%+23.6%+19.6%+36.2%

+/-

5,8946.4

63.2

81.8987.4

2,969.21,378.5

Q1-Q3 2009


7.523.0

27.7308.2

2,482.6242.9

Q3 2008

%

MEUR

MEUR

MEUR

MEUR

MEUR

Unit

7.726.1

31.0337.0

2,969.2324.0

Q3 2009

7.387.9

105.71,205.92,590.11,543.4

2008

6.6EBITA margin52.4EBITA

65.7EBITDA798.8Sales

2,482.6Order backlog (as of end of period)

1,012.1Order intake



Market: global pulp market developed solidly with increasing demand from Asia, especially from China. Project activity remained at a low level during Q3 2009, both for new pulp mills and for rebuilds of existing plants; service business relatively resilient.

Order intake in Q3 2009 developed solidly (greenfield pulp mill order from China booked in Q3 2009).

Restructuring underway to adjust to prevailing market conditions.

PULP & PAPERStill impacted by weak capital business

6.4-7.75.8-7.43.9%EBITDA margin

-7.2%-

-62.8%

-50.6%-34.0%-32.5%+23.6%

+/-

-7.2%-

-87.7%

-63.9%-31.6%-32.5%-36.7%

+/-

4,3961.17.2

26.3671.2692.5604.4

Q1-Q3 2009


6.018.8

24.1311.3

1,025.2244.0

Q3 2008

%

MEUR

MEUR

MEUR

MEUR

MEUR

Unit

3.47.0

11.9205.4692.5301.6

Q3 2009

5.066.3

84.51,326.6

752.81,033.8

2008


72.8EBITDA981.4Sales

1,025.2Order backlog (as of end of period)

955.5Order intake



METALSContinued weak market conditions

Market: project activity remained weak; some signs of stabilization during Q3 2009.

Solid order intake in Q3 2009, but below the very high reference value of last year.

Despite decline in sales, EBITA margin increased in Q3 2009.

7.5-6.78.8-7.75.8%EBITDA margin

+0.1%-

-1.1%

-2.1%-25.0%-18.8%-32.3%

+/-

+0.1%-

-37.8%

-35.6%-14.6%-18.8%-51.0%

+/-

9915.2

18.4

20.4351.9656.5261.7

Q1-Q3 2009

996990991990-Employees (as of end of period)

6.39.1

9.7144.4808.5172.0

Q3 2008

%

MEUR

MEUR

MEUR

MEUR

MEUR

Unit

8.39.0

9.5108.3656.5116.4

Q3 2009

7.140.1

42.6566.2736.2611.52008


31.7EBITDA412.2Sales808.5Order backlog (as of end of period)

534.6Order intake



Market: solid project activity for municipal solid/liquid separation equipment; relatively low investment activity for industrial applications; demand for biomass drying systems stable.

Order intake in Q3 2009 slightly up.

Decreases in sales and earnings; despite decline in sales, EBITA margin increased in Q3 2009.

ENVIRONMENT & PROCESSStable sales development, order intake slightly up

8.8-6.06.9-6.86.8%EBITDA margin

-3.5%-

-4.8%

-3.7%-15.0%-14.4%+4.5%

+/-

-3.5%-

-5.6%

-4.9%-5.0%

-14.4%-15.5%

+/-

1,3805.2

11.9

15.5227.7162.9231.8

Q1-Q3 2009


4.74.2

5.489.3

190.275.4

Q3 2008

%

MEUR

MEUR

MEUR

MEUR

MEUR

Unit

5.34.0

5.275.9

162.978.8

Q3 2009

7.427.3

32.1366.6151.8361.22008



274.3Order intake



Market: project activity in the animal feed sector continued to be impacted by the global economic and financial crisis; low project activity in special feed; reasonable project activity within the biomass/wood pelletizing market, although also somewhat impacted by funding restrictions.

Order intake in Q3 2009 significantly down.

EBITA and margin sharply down due to higher costs as a result of increased outsourcing.

FEED & BIOFUELUnchanged difficult market conditions

9.2-8.4-0.3-9.42.9%EBITDA margin

-8.5%-

-124.0%

-103.3%-17.4%-35.3%-42.8%

+/-

-8.5%-

-85.2%

-73.0%-13.8%-35.3%-36.6%

+/-

5151.41.3

2.792.033.478.5

Q1-Q3 2009

566563515563-Employees (as of end of period)

7.02.5

3.035.751.637.4

Q3 2008

%

MEUR

MEUR

MEUR

MEUR

MEUR

Unit

-2.0-0.6

-0.129.533.421.4

Q3 2009

8.011.6

13.3144.546.5

155.42008



123.9Order intake






Long-term goals

Summary

Contents


HYDROSolid market with excellent long-term outlook

Q1-Q3 2009

High project activity worldwide: modernization of existing plants in Europe and North America; new hydropower plants mainly in emerging markets.

Good development of order intake in all divisions, including the pumps and turbo generator businesses.

Sales and earnings increased compared to reference period of last year.

Current environment / Mid- & long-term drivers

Climate change – green electricity.

Replacement of existing aged installed base in Europe and North America.

Growing electricity demand in emerging markets.

Economic stimulus packages – renewal of infrastructure.


PULP & PAPERDespite current downturn, unchanged strong long-term drivers

Q1-Q3 2009Low project activity in the capital business; service less affected.

Order intake substantially below last years’ reference level; order from China (Chenming, 160 MEUR) booked in Q3 2009.

Margins impacted by restructuring expenses and lower sales; price pressure in (large) capital business.

Restructuring underway.

Current environment / Mid- & long-term driversLong-term shift of production capacity from northern to southern hemisphere to continue – however, major projects currently delayed, but execution highlylikely due to pre-investments in land, plantations, etc.

Expansion of pulp capacities expected in China and Russia (medium-/long-term).

Continuing demand for biomass/recovery boilers due to increasingenvironmental regulations/incentives (e. g. USA, Canada).

Increasing project activity for recycled fiber lines in China.


METALSBottom appears to have been reached

Q1-Q3 2009

Low project activity worldwide; however some signs of stabilization.

Order intake in Q3 2009, at 116.4 MEUR, was solid; orders mainly from emerging markets (China, Brazil).

Earnings and profitability in Q3 up despite decline in sales.


Continuing low capacity utilization in the carbon and stainless steel industries; bottom appears to have been reached.

Weak cash flows at customers limit capex for next few quarters.

Single investments in special segments (automotive China).


ENVIRONMENT & PROCESSStable municipial and biomass drying businesses

Q1-Q3 2009

Good project activity in municipal business (China, USA); lower demand in some industrial segments.

Order intake in Q3 slightly up, with solid demand from municipalities; demand from industrials moderate, but stabilized.

Sales in Q3 down; however, earnings and profitability slightly up.


Municipal business: expected to continue at current level or higher.

Industrial business: depends on overall economy.

Growing environmental awareness and more stringent regulations to support demand for environmental equipment.


FEED & BIOFUELFeed expected to recover, good pipeline for biomass projects

Q1-Q3 2009

Low project activity in animal feed with projects delayed due to funding restrictions; reasonable project activity for biomass/wood pelletizing equipment.

Order intake down compared to Q1-Q3 2008, weak development in Q32009.

Earnings and margins down due to higher costs for increased outsourcing.


Large feed projects still somewhat delayed due to funding restrictions – however, expected to recover mid-term.

Good pipeline of biomass projects, although also somewhat affected by funding restrictions.

Strong growth of biomass market expected.





Long-term goals

Summary

Contents


Confident to continue growth: Confirmation of goal to increase sales by 10% p. a. on average.

CAGR 1999-2008: +21% p. a. (thereof 13% p. a. organic growth).

However, 4.5 bn. goal delayed due to financial crisis.

4.5 bn. Euro sales goal delayed due to financial crisis

Range depends on overall economy andon M&A success.

Sales in MEUR

2010/2011E

Sales target

Linear (sales in MEUR)

Target achievement most likely delayeddue to financial crisis.

656937

1,3191,110 1,225

1,4811,744

2,710

3,2833,610

2,330

4,500

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Q1-Q32009

2009


3.5

4.75.2 5.3 5.1

6.3 6.1 6.1 6.4 6.5

5.4*

8.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Q1-Q32009

7.0

Average EBITA margin 2004-2008: 6.3%Average EBITA margin 1999-2003: 4.8%

2010/2011P

?

Margin development depends on overall

economy and onM&A success.

Sales (in MEUR)

EBITA margin target7% over the cycle

EBITA margin H1 2009:5.1% excl. restructuring expenses3.6% incl. restructuring expenses

?

* excl. restructuring expenses

4.8

6.3

656

937

3,610

3,283

2,710

1,744

1,481

1,2251,1101,319


Target for renewable energy sales

373

8761258

1,744

2,710

3,2833,610

1,574

4,500

1,5201,771

2,250

>50%54%

49%46%

32%

21%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2005 2006 2007 2008 Q1-Q3 2009 2009E 2010E 2011E0

10

20

30

40

50

60

Total sales (MEUR)Renewable energy sales (MEUR)Renewable energy sales share of total sales

ANDRITZ’s renewableenergy products:

Equipment for hydro-power stations.

Recovery boilers/power boilers for thepulp and paperindustry.

Biomass drying.

Biomass pelletizing.

Equipment forbiofuel production(second generation).

Long-term more than 50% of Group sales


DividendSustainable dividend payout ratio on top of strong sales growth

Payout ratio

Dividends 2002-2006 adjusted for share split of 1:4

~50.0%40.3%38.3%

32.5%32.6%34.3%44.2%44.1%

2002 2003 2004 2005 2006 2007 2008 2010E

Dividend per share (EUR)

1.101.00

0.75

0.500.35

0.250.23

2002 2003 2004 2005 2006 2007 2008 2009 2010 E





Long-term goals

Summary

Contents


Summary

Solid business development despite crisis due to broad diversification, strong cash position and solid balance sheet structure.

Implemented restructuring measures to adjust cost structure to lower business volume and to enhance future competitiveness.

Business development impacted by economic crisis short-term; however, long-term growth drivers and structural trendsshould ensure long-term growth of ANDRITZ.

Achievement of 4.5 bn. sales and 7% EBITA margin goals (Capital Market Days 2008) delayed due to financial crisis, but still valid.

Targets Capital Market Days 2009:▪ Confirmation of 4.5 bn. sales and 7% EBITA margin goals.▪ Long-term goal to have more than 50% of Group sales

coming from renewable energy products.


Certain statements contained in this presentation constitute ‛forward-looking statements.’ These statements, which contain the words ‛believe’, ‛intend’, ‛expect’ and words of similar meaning, reflect management’s beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially.

As a result, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to publicly announce the result of any revisions to the forward-looking statements made herein, except where it would be required to do so under applicable law.

Note: 2008 figures restated

According to IFRS.

Disclaimer

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