Prepared by E-Services -

Alcan + Pechiney

A New World of Opportunity


December 2003



© 2003 ALCAN INC.





Alcan has filed with the Securities and Exchange Commission (“SEC”) a registration statement to register the Alcan Common Shares to be issued in the U.S. offer, including related tender/exchange offer materials, and such registration statement has become effective. Investors and Pechiney securityholders are urged to read the registration statement and related tender/exchange offer materials and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain important information. Investors and Pechiney securityholders may obtain a free copy of the registration statement and related tender/exchange offer materials and other relevant documents at the SEC’s Internet web site at, and the transaction-related documents have been mailed to Pechiney securityholders. Additional copies of the transaction-related documents may be obtained at Alcan’s expense by contacting the Information Agent for the offers, D.F. King & Co., Inc, toll-free at 1-800-488-8035 (North America), 0-800-90-2614 (France), 0-800-389-7892 (U.K.) or (44) 20-7920-9700 (collect in Europe).

This communication is for informational purposes only. It shall not constitute an offer to purchase or buy or the solicitation of an offer to sell or exchange any securities of Pechiney, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The solicitation of offers to buy Alcan Common Shares will only be made pursuant to the prospectus, dated October 24, 2003, and related materials. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.


Certain statements made in this communication are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Although Alcan’s management believes that the expectations reflected in such forward-looking statements are reasonable, readers are cautioned that these forward-looking statements by their nature involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including those listed under “Cautionary Statement Concerning Forward-Looking Statements “ and “Risk Factors” in the prospectus, dated October 24, 2003, included in the registration statement filed with the SEC. See the previous paragraphs for information about how you can obtain a free copy of the registration statement.







This presentation includes certain information concerning Pechiney and the combined business of Alcan and Pechiney. This information is subject to risks and uncertainties. We have based this information on publicly available information about Pechiney (primarily filings by Pechiney with the SEC and the French Commission des opérations de bourse). However, to date Pechiney has granted Alcan only limited access to non-public information regarding Pechiney and Alcan has no means of compelling such access. In addition, Pechiney’s primary financial statements are prepared in accordance with generally accepted accounting principles (“GAAP”) in France while Alcan’s primary financial statements are prepared in accordance with Canadian GAAP. There are differences between Canadian and French GAAP. The unaudited pro forma information included herein is prepared based on the US GAAP information that Pechiney discloses publicly. Alcan has not been in a position to verify the Pechiney information or the pro forma information about the combined entity included in this presentation. Some of the information about Pechiney in this presentation is based on good faith estimates by Alcan or industry sources that may be materially inaccurate. The pro forma information presented is not necessarily indicative of the operating results or financial condition that would have been achieved had Alcan’s offer for Pechiney been completed duringthe periods or at the times presented, nor is this information necessarily indicative of future results or conditions of Alcan after it has acquired Pechiney. The pro forma information does not reflect the impact of synergies that Alcan expects to realize over time or the costs associated with the integration of operations necessary to achieve such synergies nor does it reflect the impact of significant divestitures that Alcan must make as required by antitrust regulators. Some of the risks associated with the information about Pechiney and the combined Alcan and Pechiney is discussed under “Risk Factors” in the prospectus, dated October 24, 2003, included in the registration statement that we have filed with the SEC in connection with the offer.

Certain terms used in this presentation are defined in the appendix.





Alcan + Pechiney
A New World of Opportunity



Strategic Rationale

Compelling Strategic Rationale

Creates Substantial Value for Shareholders





Strategic Rationale

US$250 Million Annual Pre-Tax Cost Synergies

 Synergies are Realistic and Achievable

100% percent of  synergies
by year-end 2005

   Implementation:  US$200million
   CAPEX:  US$50 million

$50 million of synergies adds
US$0.10 to EPS.




Strategic Rationale

Regulatory Review

 Clearance by MTF, DOJ and French Treasury


European Commission US Department of Justice French Treasury
  • Divestiture of either
    • 50% share in the AluNorf(1)
      mill and the Göttingen and
      Nachterstedt mills
    •      Neuf-Brisach(1), Rugles and,
           at purchaser's option,
  • Divestiture of Pechiney's
    aluminum rolling mill
    located in Ravenswood
    (West Virginia)
  • Continuity of operations at
    industrial sites except those
    which Pechiney has announced 
    would be closed
  • Continue licensing of alumina
    refining and smelter cell
  • Divestiture of Alcan’s anode
    baking technology business
  • Elimination of the overlap in
    aluminum aerosol cans and

    aluminum cartridges
  • Location in France of:
    • Global HQ for packaging
      and aerospace operations
    • Global HQ of new cell
      technology for primary
    • European headquarters
      for primary aluminum
    • Global HQ for engineered


Total commitments amount to approximately 5% of pro-forma sales

(1) Alcan's Latchford casting operations can also be added to either the AluNorf or Neuf-Brisach packages at the purchaser’s option.



Strategic Rationale

Integration Underway

Successful Track Record


Lessons Learned

Maintain current operating focus

Line leadership of integration process

Jointly staffed integration teams

Fill and announce key jobs as soon as possible

Timeline to achieve full synergy run-rate within 2 years



Dec 2003

Top-level executive team and structure announced

Integration leadership team in place

Jan 2004

Completion of personnel review

April 2004

Completion of synergies review

June 2004

Final decisions on key assets






Strategic Rationale


Leadership Team






Pechiney Overview

Pechiney’s Key Strengths

An Industry Leader





Pechiney Overview

Aluminum Smelting Technology Sales

Unrivaled Leadership as #1 Technology Provider


  • 80% market share in the Western World in the past 10 years
  • New AP50 technology ready for deployment
  • Main break-through from AP50 is 15% reduction in capital invested per ton
  • Presence in technology market and profitability is further enhanced by ECL, a leading provider of equipment for smelters






Pechiney Overview


 50% market share with Airbus
Long-term Trend Towards More Plate Intensive Aircraft



Pechiney Overview


The A380 Will Significantly Impact Airbus’ Plate Consumption
56% Market Share Secured To Date On New Model


Airbus plate consumption

Reference : base 100 in 2003 in equivalent A320 aircrafts

Source: Airlines monitor & Pechiney


Weight of plates
on A320 = 90t

Weight of plates
on A380 = 900t




Pechiney Overview

International Trade

A Profitable Business That Benefits From Scale


Three businesses:
  • Agencies: International network
    trading goods for Pechiney as
    well as for third parties
  • Distribution: France, Germany /
    mostly semi-finished aluminum
  • Physical trading: Alumina,
    aluminum, copper, etc.


  • Takes advantage of volumes
    shipped by business units to
    enhance traded quantities and
    to improve margins
  • Conservative risk approach
    and strict monitoring of risk
  • A long standing track record of
    high profitability







Pechiney Overview

Continuous Improvement





The Combined Company

Global Group – Balanced Presence

88,000 Employees, 322 Operating Facilities
in 50 Countries Around the World


Revenues are presented on the basis of the average US$/Euro exchange rate during 2002




The Combined Company

Diversified Business Mix

 Balanced Portfolio
2002 Revenue

Alcan: US$12.3 Bn


Pechiney: US$11.4 Bn (1),(2)


Pro Forma: US$23.7 Bn (1),(2)


(1) Including Pechiney trading revenue of US$4.8 billion
(2) On the basis of average US$/€ exchange rate during 2002 of .95




The Combined Company

Increased Core Market Presence

 Strengthens Current Position

2002 Revenue By End-Use Market (1) (2)


Alcan Pechiney


                             Pro Forma


(1) Excludes Pechiney trading revenues of US$4.8 billion
(2) On the basis of average US$/€ exchange rate during 2002 of .95

Source: Pechiney figures are based on estimates derived from publicly available documents



Business Group Impact

Bauxite & Alumina

 8 Alumina Refineries on 4 Continents -- 6.0 Mt of Capacity*




Business Group Impact

Primary Aluminum

24 Smelters on 5 Continents -- 3.4 Mt of Capacity

Largest share of low-cost smelting capacity in the world

        50% in bottom third of global cost curve

Advanced high-amperage smelting technology (AP-30 & AP-50 cell)

Alcan's wholly-owned hydro power

Diversified low-cost primary position

Greater scale and financial strength to leverage AP-50 technology

Increased brownfield and greenfield opportunities


 (1) Adjusted to include Alouette for full year Source: CRU (Industry and Market Outlook, January 2003)



Business Group Impact

Rolled Products

Largest Low-cost Rolling System
3.4 Mt of Sheet and Foil Capacity in 12 Countries





Positioned to serve growing demand for automotive applications in North America and Europe

Capacity and reach to address expanding aluminum fabrication needs in any region

Leverage best manufacturing practices

Product mix optimization/plant reloading opportunities



Business Group Impact

Engineered Products

$2.6 Billion in Revenues and 74 Facilities in 17 countries

Entry into high value-added aerospace
    market and excellent platform to grow
    business. No. 1 supplier to Airbus.

Hard-alloy extrusions complement
    Alcan’s specialty soft/medium extrusion
    operations in Europe

Full range of product and technical
    solutions for aerospace and transportation

Synergy opportunities





Business Group Impact


Creates No. 1 Food Flexibles and Pharma Packaging Supplier $6 Billion in Revenues and 190 Facilities in 26 Countries

  • Improves ability to serve multinational customers through size and scale
  • Increases presence in Americas and reinforces leadership position in Europe
  • Leverages technological and geographic diversity
  • Creates significant synergy opportunities
  • Increases backward integration into film production
  • Strong platform for future growth




Financial Dimensions

Summary of Terms

92% of Pechiney Shares Tendered in Initial Offer Period


Per Pechiney share

– €28.60 in cash, plus €1 bonus if more than 95% of Pechiney capital and voting rights on a fully diluted basis are tendered (including subsequent offering period).

– .5441 Alcan shares

€83.40 per OCEANE, plus €0.40 bonus.




Financial Dimensions

Remaining Transaction Milestones

Alcan Committed to Successful Process




Financial Dimensions


Estimated After-tax Impact on Long-term Profitability


  Change in
full year
Pre-Pechiney Post-Pechiney
Net Inc. EPS Net Inc. EPS
Aluminum +US$100/mt $120 M $0.37  $190 M $0.52 
Exchange Rates *          
     Canadian dollar +1 US cent ($11) M $(0.03) ($11) M $(0.03)
     Euro +1 US cent $4 M $0.01  $0 M $0.00 
     Australian dollar +1 US cent ($2) M $0.00  ($3) M $(0.01)

 *Excludes balance sheet translation impact




Invest with Confidence

Committed to Maximizing Value

  • Modern asset base
  • CAPEX in line with depreciation
  • Strong and stable free cash flow
  • Increased leverage to the LME
  • Resilient performance in downturns
  • Solid track record capturing synergies
  • Greater opportunities to create value









Business Group Profiles

Combined Company


President and CEO Head Office Location Sales Revenue* (billions) Number of Employees Number of Countries
Bauxite and Alumina Michael Hanley Montreal, Canada US$ 1.6 4,800 9
Primary Metal Cynthia Carroll Montreal, Canada US$ 7.1 20,000 13
Rolled Products Americas and Asia Martha Finn Brooks Cleveland, USA US$ 3.5 5,600 5
Rolled Products Europe Chris Bark-Jones Zurich, Switzerland US$ 2.4 6,700 7
Engineered Products Michel Jacques Paris, France US$ 2.6 9,700 20
Packaging Christel Bories Paris, France US$ 5.8 33,000 26




Bauxite & Alumina

8 Alumina Refineries on 5 Continents -- 6.0 Mt of Capacity*

*Equity share of plant capacity



Primary Aluminum

24 Smelters on 5 Continents -- 3.4 Mt of Capacity*

*Equity share of capacity



Rolled Products Americas & Asia

2.0 Mt of Sheet and Foil Capacity in 5 Countries


Rolled Products Europe

1.4 Mt of Sheet and Foil Capacity in 7 Countries



Engineered Products

US$2.6 billion in Revenues
80 Sites in 20 Countries





$6 billion in Revenues
190 Sites in 26 Countries



Western World Aluminum Balance

Primary Metal


  2001 2002 2003f
Production 16,670 17,230 17,730
FSU/China/E. Europe 2,700 2,750 3,150
SUPPLY 19,370 19,980 20,880
% Change -1.9% +3.1% +4.5%
DEMAND 18,920 19,570 20,490
% Change -6.2% +3.4% +4.7%
INVENTORY CHANGE +450 +410 +390




Aluminum – Rolled & Fabricated Products

2002 Pro Forma Revenues by End Market



Source: Pechiney figures based on estimates derived from publicly available documents.



2002 Financial Highlights Pro-forma


($US million) Alcan Pechiney(1) Pro Forma (1), (2)
Revenues $12,327 $11,404 $23,731
BGP (3) from operating segments $2,029 $783 $2,832
     % Margin 16.4% 6.9% 11.9%
     % Margin without trading revenues 16.4% 10.7% 14.4%
Capital Expenditures $711 $455 $1,183
(1)  Includes US$4.8 billion of trading revenue and US$72 million of related BGP
(2)  Indicative only. Unaudited figures. Accounting principles and policies not harmonized.
      Combination represents sum of the two standalone businesses without transaction adjustments
(3)  Business Group Profit



2003 Nine-Month Highlights Pro-forma


($US million) Alcan Pechiney(1) Pro Forma (1), (2)
Revenues $10,105 $9,081 $19,186
BGP (3) from operating segments $1,576 $675 $2,251
     % Margin 15.6% 7.4% 11.7%
     % Margin without trading revenues 15.6% 12.1% 14.4%
Capital Expenditures $578 $375 $953
(1)  Includes US$3.9 billion of trading revenue and US$50 million of related BGP
(2)  Indicative only. Unaudited figures. Accounting principles and policies not harmonized.
      Combination represents sum of the two standalone businesses without transaction adjustments
(3)  Business Group Profit