Conference ItauBBA Presentation

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Apresentao Usiminas2T11 - APIMEC

Usiminas Results2Q13

Information Classification: Public


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Clique paraeditar o texto

mestre

Usiminas and its

Business Units

OperationalImprovementand Financial

Results

CompanyProfile and

Market Data

Agenda

2


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Aquisition of

J. Mendes ironore mines

Aquisition of Zamprogna

Foundation of Solues

Usiminas due

to theconsolidation

of thecompanies RioNegro, Dufer,

Fasal andZamprogna,

Usial andUsicort

Single CNPJ:Cosipa is

incorporatedby Usiminas

Foundationof Usiminas

1962-OperationStart Up

PrivatizationUsiminas:1991Cosipa: 1993

Listing onLatibex

Creation of MineraoUsiminas

Partnershipwith Codemeand Metform

Selling of Terniumshares

Joint Miningand

CooperationAgreements

with MBL andFerrous

CommercialAgreementswith MMX to

explore Pau deVinho and to

use theSouthest Port

Negociationwith J. Mendes

concluded

1956

1991

2005

2008

20092010

2011 Entrance of Ternium/Tenaris

into UsiminasControl Group

Newshareholdersagreement

signed amongNipponGroup,

Ternium /Tenaris and

UsiminasPension Fund

until 2031

2012

Time Line and Shareholder Composition

3

Sale of AutomotivaUsiminas *

2013

* Conditioned to CADEs approval (CADE is the Brazilian Antitrust Regulator)


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4

Mining

Steel

Steel processing

Capital Goods

Strategically Located


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Mining

Steel

Steel Processing Capital Goods

U P S T R E A M

D O W N S T R E A M

Ipatinga

Metform and Codemestake

Cubato

Unigal UsiminasMinerao Usiminas

Solues Usiminas Usiminas Mecnica

Complete Solution of Products and Services

5


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Million tons

32.9

34.7

35.9

42.7

69.3

70.6

76.788.6

107.2

708.8

Ukraine

Brazil

Turkey

Germany

South Korea

Russia

IndiaUSA

Japan

China

Source: World Steel Association 6

Capacity

2,090

Production

1,548Consumption

1,409

Excess of Capacity542

Excess of Production

139

World Crude Steel Production in 2012


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3.8 3.9 3.9 3.93.6 3.7

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

3.5 3.5 3.6 3.4 3.4

3.7

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Flat Steel Brazilian Market

Imports (thousand tons)

7

519413

512

335 319 323

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Production

Inventories in the Distribution Network

Apparent Consumption

Million tons

Source: IABR / INDA / Usiminas

1.0 1.0 1.0 0.9 1.01.1

2.8 2.8 2.7 2.6 2.8 3.1

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

.6

.7

.8

.9

.0

.1

.2

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Million tons Monthly basis


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Usiminas and its

Business Units


Results

Agenda

8

CompanyProfile and

Market Data


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Installed Nominal Capacity : 9.5 million tons / year

Slabs Hot Coils Cold CoilsHeavy PlatesSlab Caster EG HDG

1,950,000tonsOptimizedRolling

Capacity

3,200,000tons1,900,000tons 1,020,000tons350,000tons

Cubato Plant -1,200,000tons -4,400,000tons1,000,000tons4,500,000tons

3,700,000tonsNominalCapacity 8,000,000tons2,000,000tons9,500,000tons 1,050,000tons360,000tons

-

Ipatinga Plant 1,050,000tons360,000tons2,500,000tons3,600,000tons1,000,000tons5,000,000tons

Galvanized

Flat steel production

Steel Business Unit

9


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Auto Industries

Cold Rolled andGalvanized (EG and HDG)

Ship-Building

Heavy Plates

Pipelines

Heavy Plates and HotRolled

Pressure Vessels

Heavy Plates

AgriculturalMachines

Heavy Plates and HotRolled

Civil Construction

Heavy Plates, Hot and ColdRolled and Galvanized (EG

and HDG)

Autoparts

Hot Rolled

HouseholdAppliances

Cold Rolled andGalvanized (EG and

HDG)

Steel Business UnitEveryday steel application

10


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Steel Business UnitCrude steel production Thousand tons

Cubato

Ipatinga

11

1,783 1,858

1,549 1,5091,672

1,845 1,837 1,8041,662 1,749

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13


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31%

18%

6%9%35%

Au to IndustryIndustryHo usehold App liancesCivil ConstructionDistribution

Sales Breakdown bySegments 2Q13

Sales Thousand tons

12

Steel Business Unit

1,246 1,327 1,262 1,209 1,2261,428

266

561487 522 365 144

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

Domestic Market Exports

1,512

1,8881,749 1,731

1,591 1,572

Total


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117189

83 74 100

201

57 20

178

289

4%

7%

3% 3%4%

7%

2%1%

7%

10%

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Adjusted EBITDA Adjusted EBITDA Margin

Adjusted EBITDA/ Adjusted EBITDA MarginSteel Business - R$ Million

13

Steel business Adjusted EBITDA is back to 2 digits


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Steel Business Unit

Production capacity of 2.3million tons per year

Main Applications

Higher product performance and efficiency

Exclusive coils dimensions in Brazil

Higher productivity for customers

High level of automation

Lower electric energy consumption

High-strength steels

14

Hot Strip Mill II - Cubato Galvanizing Line II - Ipatinga Higher production capacity

Products portfolio increase

Deep drawing steel

Products Inovation

High-strength steels

Excellent flatness

Production capacity of 550thousand tons per year

Concluded investments


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Located in Serra Azul/MG4 mining sites, acquired from J. Mendes Group in February 2008Reserves of 2.6 billion tons of iron oreLife time until 2045MRS: 20% of voting shares, being part of the Control Group

Retroarea in Itagua Port

MBL

ArcelorMittal

Ferrous(Santanense)

Comisa

Emicon

MMX

Ferrous

MUSAPau de Vinho

MUSALeste

Minerita

MUSA

Central

MUSAOeste

Itatiaiuu

Igarap So JoaquimDe Bicas

70.0%

30.0%

Mining - Minerao Usiminas

Minerao Usiminas15


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Production:

Thousand tons

Sales:

16


1,854

1,5171,785

1,4961,649 1,621

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

1,7301,497

1,142

1,747

1,346 1,366

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13


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Adjusted EBITDA/ Adjusted EBITDA MarginSteel Business - R$ Million

17

Even with the iron ore price decrease in the internaticonal market, the EBITDA margin inthe Mining Business remained at a high level

139

180156

129 111 100

56

173

144 120

65% 68%61%

54%

46% 47%

36%

59% 58%54%

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13



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Iron Ore Production Capacity million tons by the end of the year

Friable Project: ongoingEstimated Capex of R$800 million

Compact Project:under detailing phase

Investment Plan

18



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Friable Project: Samambaia and Flotation Plants

19


Samambaia Plant

Flotation Plant

Project execution:95% (jun/2013)

Estimated Capex :R$800 million

Production Capacity:12 Mton / year


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Retroarea in Itagua Port

20


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10 industrial units in MG, SP, RS, ES, BAand PEProcessing capacity of 2 million tons/year

Net Revenue of R$998 million in the 1H13

Steel ProcessingSolues Usiminas and Automotiva Usiminas

21Solues Usiminas

Automotiva

Camaari

Porto Alegre

Campo Limpo Paulista

Guarulhos Bonsucesso Guarulhos So Roque

Taubat

Recife

Serra

Betim Santa Luzia

Solues Usiminas

Automotiva Usiminas

In the 2Q13, Usiminas entered into anAgreement with Aethra Sistemas

Automotivos S.A., for the amount of R$210million (enterprise value) to transfer 100%of its shares. The transaction conclusion isconditioned to the approval of CADE(Brazilian Antitrust Regulator) and is alignedwith the Companys strategy to focus on itscore business, in order to maximize itscompetitive positioning


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Located in Ipatinga/MG, it is one of thelargest capital goods companies in Brazil

Market Segments: Steel Structures,Shipbuilding and Offshore, Oil and Gas,Industrial Equipment, Industrial Assembly,

Foundry and RailcarsNet Revenue of R$524 million in the 1H13

Usiminas Mecnica

Capital Goods

22

Braslia 3rd Bridge

Ship Panel

22

Platform


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Usiminas and its

Business Units


Results

Agenda

23

CompanyProfile and

Market Data


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Average 2011: 61.6+10.1%

Increasing Coke ProductionCoke Plant #3 (Ipatinga) Thousand tons

Average 2012/2013:67.8

24

55.3 54.660.3 58.8

61.9 64.167.3 67.5

63.7 63.559.0

63.166.2

62.265.3 65.8

68.5 67.0 68.8 68.0 66.569.2

66.1 68.169.0

61.5

69.8 67.2 69.3 67.1


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Adjusted EBITDA - ConsolidatedR$ million

337365 343

218190

232

150

226

313

441

11%12% 12%

8%7% 7%

4%

7%

10%

14%

-10%

-5%

0%

5%

10%

15%

100

150

200

250

300

350

400

450

500

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13


+41%


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R$2.6 billion Reduction

Reduction of 596 thousand tons in inventories

Working Capital Consolidated / Steel Business

4.8

2.6 2.7 2.2

Dec/11 Dec/12 Mar/13 Jun/13

1,512

1,031903 916

4Q11 4Q12 1Q13 2Q13

102 54 51 52 Inventory days


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3,070

1,849

985

41

365

555

81

276

112

3,192

2,490

1,652

2010 2011 2012

Steel Mining Others Total

29

- 22%

- 34%

Capex Performance ConsolidatedStrict CAPEX control - R$ million

45

142112

10417

15

175

261

1Q13 2Q13


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Debt Profile and Cash Position - Consolidated R$ million

30

2,804

194948 902 733 1,031

301671

25

1,932

272

411 386 765 2651,108 3

2

Cash 2013 2014 2015 2016 2017 2018 2019 2020 on

Local Currency Foreign Currency

4,736

466

1,359 1,498 1,296 1,409

27

674

1,288


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3,4103,611

3,280

2012 1Q13 2Q13

Net debt

Net Debt - ConsolidatedR$ Million

31

9% net debt reduction, even with a 10% Real devaluation in the 2Q13

-9%


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Results achieved in the 2Q13

32

Recovery of Consolidated EBITDA margin

Recovery of margins in the Steel Business Unit

Higher steel sales volume in the domestic market

Company financial improvement, with net debt reduction


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Final Message

CostsCAPEXWorking Capital

Productivity IncreaseIndustrial EngineeringBenchmarking

Operational EfficiencyDomestic Sales IncreaseLeverage Reduction

Companys Profitability Recovery

Fase IControl

Fase IIImprovement

Continuous

Process

33


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Quarterly Results Accounted

34

Per Business Unit

Note: All transactions among the business units are made at market price.

R$ million

2Q13 1Q13 2Q13 1Q13 2Q13 1Q13 2Q13 1Q13 2Q13 1Q13 2Q13 1Q13

Net Revenue 223 248 2,898 2,666 639 546 265 259 (780) (524) 3,244 3,195

Domestic Market 191 207 2,683 2,223 634 538 265 259 (780) (524) 2,992 2,703

Exports 33 41 215 442 5 8 0 0 0 0 252 491

COGS (90) (86) (2,707) (2,590) (570) (495) (249) (249) 749 433 (2,868) (2,988)

Gross Profit 133 162 190 75 68 51 16 10 (31) (91) 376 207

Operating Income(Expenses)

(24) (29) (141) (134) (49) (48) (22) (14) 1 1 (234) (224)

EBIT 109 133 50 (58) 19 3 (6) (4) (30) (90) 142 (16)

Adjusted EBITDA 120 144 289 178 33 16 1 2 (1) (27) 441 313

Adj.EBITDA Margin 54% 58% 10% 7% 5% 3% 0% 1% - - 14% 10%

* Unigal 70%

Income Statement per Business Units - Non Audited

ConsolidatedMining Steel*Steel

ProcessingCapital Goods Adjustment


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www.usiminas.com/ri

ADR Level I

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 Managements

expectations in relation to future performance. These expectations are highly

dependent on market behavior, on Brazils economic situation, on the

industry and on international markets, and are therefore subject to change.

Cristina Morgan C. DrumondHead of IR

[email protected]: 55-31-3499.8772

Fax: 55-31-3499.9357

Leonardo Karam [email protected]

Phone: 55-31-3499.8550

Diogo Dias [email protected]

Phone: 55-31-3499.8710

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