#1#2#3#4#5#6Business Environment & Competitive Position Evolution of Raw Material Prices We have experienced a dramatic rise in our raw material prices since 2004. The trend has been flatter in 2006 for resins, though not for aluminum. Raw material purchases Paper 4% Aluminum 21% Other 12% Chemical products 14% 2006 ALCAN INC. Film 27% Resins 22% Index (1980=100) 250 200 150 100 50 0 1980 1982 1984 LDPE Resin Aluminum 1986 1988 1990 1992 1994 1996 Chart based on nominal prices 1998 ALCAN 2000 LDPE resin price increased by 70% since 2002 2002 2004 2006 Slide 6#7Business Environment & Competitive Position Effect of Cost Pressures since 2002 Unprecedented rise in raw material prices significantly squeezed industry margins NA Flexibles Industry - 2001-2005 Global Packaging Companies - 2001-2005 Source: Harris Nesbitt, May 2006 Bemis, Sealed Air, Winpak, Huhtamaki, Amcor, Alcan Packaging LLDPE Europe/NA Index 2001-100 Gross Margin % Average TTM Gross Margin vs. Resin Pricing Flexible Packaging Companies 26% 25% 24% 23% 22% 21% 20% 2001 3Q01 2Q02 3Q02 2003 ITTM Gross Margin 3Q03 2004 3Q04 200 por acos aco 3Q05 LLDPELPDE $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 Resin Price ($ per lb) EBITDA Margin % EBITDA % Sales 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% + Hr 2001 . 2002 ALCAN + 2003 2004 2005 ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ 180 160 140 120 100 80 60 40 20 0 ➤ Average EBITDA margin decline of 3.7% from the peak of 2002, and 2.2% from the more average years of 2001 & 2003 LLDPE Price Index (2001=100) Weakening economic conditions, especially in Europe, have also been a significant factor contributing to declining margins over the period 2002-2005 ©2006 ALCAN INC. Slide 7#8#9Strategic Progress III Our margins have been relatively more resistant to cost pressures, due to significant progress in strategy implementation. Setting Operating Excellence as a foundation of our success ■ Rationalization of our portfolio ALCAN ■ Focus on growing and attractive market segments 2006 ALCAN INC. Slide 9#10#11#12#13#14#15#16#17#18#19#20#21#22#23#24#25#26#27#28#29