Post on 26-Dec-2015
WebcastFourth Quarter 2004 Results
Presentation:Paulo Penido Pinto MarquesCFO and Investor Relations Director
Disclaimer
“Declarations relative to business perspectives of the
Company, operating and financial results and projections,
and references to the growth of the Company, constitute
mere forecasts and were based on Management’s
expectations in relation to future performance. These
expectations are highly dependent on market behavior,
Brazil’s economic situation, the industry and international
markets, and are therefore subject to change.”
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The Steel Industry - Brazil
• Brazilian crude steel production totaled 8.3 million tonnes in 4Q04 and 32.9 million in 2004, a growth of 5.7%.
• Domestic flat steel demand grew 13.7% and reached 10.5 million tonnes in the year.
• Reaction was driven initially by exporting companies and, from 2H04 onwards, by recovery in investment-stimulated and domestic consumer segments.
3
The Global Steel Industry
• World crude steel production: 9% growth in relation to 2003.
• Prices: historic highs during the year.
• Economic growth in main countries, highlighting North American and Chinese markets (high steel demand)
• Price increases in raw materials used in steel making.
4
Consolidated Results QoQ
5
R$ million 4Q 2004 4Q 2003 3Q 2004Chg.% 4Q/ 4Q
Total Sales Volume (000 t) 2,170 2,120 2,011 2
Net Revenues 3,809 2,442 3,285 56Net Income 1,127 359 1,005 214
EBITDA (a) 1,816 763 1,602 138EBITDA Margin 47.7% 31.3% 48.8%
Net Debt 3,495 6,744 4,975 -48Net Debt / EBITDA 0.6x 2.2x 1.1x
(a) Earnings before interest, depreciation, amortization and participations.
Highlights
Consolidated Results YoY
6
R$ million 2004 2003 Chg.%
Total Sales Volume (000 t) 8,062 7,710 5
Net Revenues 12,230 8,660 41Net Income 3,019 1,306 131
EBITDA (a) 5,624 3,072 83EBITDA Margin 46.0% 35.5%
Net Debt 3,495 6,744 -48Net Debt / EBITDA 0.6x 2.2x
(a) Earnings before interest, tax, depreciation, amortization and participations.
Highlights
• The System sold 2.2 million tonnes in 4Q04 and 8.1 million tonnes in 2004, 5% more than in 2003.
• Domestic sales totaled 5.8 million tonnes in 2004, 8% more than in 2003.
• Even with the entry of new players, the System ended 2004 with a 55% market share.
• Consolidated exports totaled 2.3 million tonnes in 2004, falling slightly by 4%.
Usiminas - Sales
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69%78% 67% 67% 75% 65% 64% 73%
72%
72% 71%
Consolidated Sales (000 t.)
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04
Domestic Market Export Market
25%
75%
1,8301,939
74%
26%
1,822
65%
35%
2,119
64%
36%
73%
28%
1,910
72%
72%
27%
1,9712,011
29%
71%
2,170
71%
29%
Usiminas – Sales Mix by Product
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Sales Volume 2004
Hot Rolled
26%
Galvanized
8%
Slab
15%
Processed
Products
5%
Cold Rolled
25%
Heavy Plate
21%
Sales Volume 2003
Hot Rolled
27%
Galvanized
8%
Slab
15%
Processed
Products
5%
Cold Rolled
25%
Heavy Plate
20%
• The breakdown of sales by product remained stable, but with increased volume.
• Share of heavy plate increased to 21% in the product mix in 2004, as a consequence of strong demand and higher average prices than other steel products offered.
Usiminas – EBITDA
9
889
760
660
763
921
1.28
5
1.60
2
1.81
6
42%
33%31%
39%
46%
36%
49% 48%
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04
EBITDA (R$ million) EBITDA Margin
• EBITDA reached R$ 1.8 billion in 4Q04, increasing 138%.
• For the year 2004, EBITDA rose 83% and passed the R$ 5.6 billion mark.
Usiminas – Consolidated Net Debt8,
1
7,4
7,4
6,7
6,3
6,1
5,0
3,5
2,7
2,2 2,22,0
1,7
2,2
1,1
0,6
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04
CND (R$ billion) CND/ EBITDA
• In 2004, solid cash generation enabled the System to reduce debt by US$ 621 million.
• The Usiminas System ended the year with US$ 717 million in cash.
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Usiminas – Total Consolidated Debt4Q04: R$ 5.4 billion
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By Term
Long Term74%
Short Term26%
By Index
Swap CDI
33%
TJ LP
11%
US$
38%
IGP-M
6%Outros
12%
Foreign currency71%
Local currency29%
• The debt profile was extended. The percentage of long-term commitments increased from 63% in Dec 2003 to 74% in Dec 2004.
Usiminas – 4Q04 Consolidated Cash Flow(Brazilian Corporate Law) – R$ million
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1,90219911160
288109
6191481,816
1,324
Initi
al B
alan
ce
EBITDA
New F
inan
cing
Amorti
zatio
n and F
inan
cing
Inte
rest
Work
ing C
apita
l Var
iatio
n
Inve
stm
ents
Divid
end / I
ntere
st o
n Cap
ital
Other
s
Final
Bal
ance
Stock Performance in 2004
• Valuation of Usiminas PNA (USIM5): 65.3% vs.17.8% Ibovespa index.
• Dividends and interest on capital totaled R$ 1.1 billion, i.e., a 35% dividend pay-out ratio and a 9.5% dividend yield.
• Usiminas has the third largest weight on the Ibovespa (4.78% of the Index).
• Company is preparing to list on Latibex.
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USIMINAS PNA X IBOVESPA IN 2004
12/3
0/20
03
1/30
/200
4
2/29
/200
4
3/30
/200
4
4/30
/200
4
5/30
/200
4
6/30
/200
4
7/30
/200
4
8/30
/200
4
9/30
/200
4
10/3
0/20
04
11/3
0/20
04
12/3
0/20
04
USIM5 +65%
IBOVESPA +18%
R$ 32.63
R$ 53.95
26,196
22,236
Investments (R$ million)
600
910
579
333475
2002 2003 2004 2005 2006
74%
72%New investment phase started in 2005-2006
Usiminas:
• New coke oven plant, which will make company self-sufficient in coke.
• 60MW thermoelectric power plant to increase self generation in Ipatinga
Cosipa:
• Top blowing blast furnace turbine in to increase self generation in Cubatão
• Revamping of continuous casting machine
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Outlook
• Brazilian economy tends to grow approx. 3.5% in 2005.
• Brazilian flat steel market should grow by 9% in 2005, according to the IBS.
• No substantial international price reductions are foreseen in the medium term in function of heated demand and raw materials increases.
• Consequence of this scenario: solid cash generation seen in last quarters should continue.
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Goals of the Usiminas System in 2005
• Maintenance of product sales at 8 million tonne level.
• Domestic market continues a priority = 75% of sales, investing in stability of commercial relations and maintenance of business profitability.
• Market share maintenance, with position of leadership in flat rolled steel market.
• Priority of funds generation given to investment program, maintenance of dividend policy and continuity of debt repayment.
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For Additional Information:Usiminas Investor Relations
Luciana Valadares dos Santoslsantos@usiminas.com.brTel: (+55 31) 3499-8619
Douglas Lee Arnolddarnold@usiminas.com.brTel: (+55 31) 3499-8856
Matheus Perdigão Rosamprosa@usiminas.com.brTel: (+55 31) 3499-8056
COSIPA - Gilson Rodrigues Bentesgilson@cosipa.com.brTel: (+55 11) 5070-8980
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Bruno Seno Fusarobrunofusaro@usiminas.com.brTel: (+55 31) 3499-8710
www.usiminas.com.br