Apresentao Usiminas

2T11 - Results
APIMEC
1Q14
Information Classification: Public

Agenda

Company
Clique para
Profile
editar oand
texto
Market
mestre Data

Usiminas and its

Business Units

Financial
Results
2

Time Line and Shareholder Composition

2013
2012
2011
2010
2009
2008
2005
1994
1991
1956
Foundation
of Usiminas
1962Operation
Start Up

Privatization
of Usiminas:
1991
Cosipa: 1993
Listing on
BOVESPA

Listing on
ADR I - NY

Listing on
Latibex

Aquisition of
J, Mendes
iron ore
mines
Aquisition of
Zamprogna

Foundation
of Solues
Usiminas due
to the
consolidation
of the
companies
Rio Negro,
Dufer, Fasal
and
Zamprogna,
Usial and
Usicort
Single CNPJ:
Cosipa is
incorporated
by Usiminas

Creation of
Minerao
Usiminas
Partnership
with Codeme
and Metform

Selling of
Ternium
shares
Joint Mining
and
Cooperation
Agreements
with MBL and
Ferrous
Commercial
Agreements
with MMX to
explore Pau
de Vinho and
to use the
Southest Port
Negociation
with J,
Mendes
concluded

Entrance of
Ternium/
Tenaris
into Usiminas
Control Group

Sale of
Automotiva
Usiminas

New
shareholders
agreement
signed among
Nippon
Group,
Ternium /
Tenaris and
Usiminas
Pension Fund
until 2031
Environmental
remediation
of the
retroarea in
Itagua/RJ

Strategically Located

Mining
Steel
Steel processing
Capital Goods

Complete Solution of Products and Services

Business Units

DOWNSTREAM

Steel Processing

Capital Goods

Steel

Mining

Solues Usiminas

Usiminas Mecnica

UPSTREAM

Ipatinga
Cubato

Minerao Usiminas

Unigal Usiminas

World Crude Steel Production in 2013

Million tons

China
Japan

779.0
110.6

USA

87.0

India

81.2

Russia

69.4

South Korea

66.0

Germany

42.6

Turkey

34.7

Brazil

34.2

Ukraine

32.8

Source: World Steel Association

Excess of
Capacity
530
Excess of
Production
132

Capacity

Production

Consumption

2,137

1,607

1,475
6

Flat Steel Brazilian Market

Production (million tons)

3,9

Apparent Consumption (million tons)

3,9

4,0
3,8

3,8

3,8

3,6
3,5

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

Million tons

2,8

2,6

3,4

4Q12

1Q13

2Q13

Monthly Basis

3,1

2,7

3Q13

3,6

4Q13

1Q14

421

439

4Q13

1Q14

601
512

2,6

2,6

1,0

0,9

1,0

1,1

1,1

1,0

1,0

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

Source: IABR / INDA / Usiminas

3Q12

3,4

3,6

Imports (thousand tons)

Inventories in the Distribution Network

2,7

3,7

3,6

3Q12

335

319

323

4Q12

1Q13

2Q13

3Q13

Agenda

Company
Profile and
Market Data

Usiminas and its

Business Units

Financial
Results
8

Steel Business Unit

Flat steel production

Installed Nominal Capacity : 9,5 million tons / year

Galvanized
Slab Caster

Slabs

Heavy Plates

Hot Coils

Cold Coils

EG

Ipatinga Plant

5,000,000tons

1,000,000tons

3,600,000tons

2,500,000tons

Cubato Plant

4,500,000tons

1,000,000tons

4,400,000tons

1,200,000tons

Nominal
Capacity

9,500,000tons

2,000,000tons

8,000,000tons

3,700,000tons

360,000tons

1,050,000tons

1,900,000tons

4,200,000tons

2,200,000tons

350,000tons

1,020,000tons

Optimized
Rolling
Capacity

360,000tons

HDG

1,050,000tons

Steel Business Unit

Everyday steel application

Auto Industries

Autoparts

Agricultural
Machines

Household
Appliances

Cold Rolled and

Galvanized (EG and HDG)

Hot Rolled

Heavy Plates and Hot

Rolled

Cold Rolled and

Galvanized (EG and HDG)

Civil Construction

Ship-Building

Pipelines

Pressure Vessels

Heavy Plates, Hot and Cold

Rolled and Galvanized (EG
and HDG)

Heavy Plates

Heavy Plates and Hot

Rolled

Heavy Plates

10

Steel Business Unit

Sales Volume - Thousand tons

1,591

1,572

1,565

144

112

1,492

365

193

1,428

2Q13

169

1,453

1,226

1Q13

1,437

3Q13
Domestic Market

Exports

1,299

1,268

4Q13

1Q14

Total

11

Steel Business Unit

Domestic Market

Sales per segment 1Q14

9%

Auto Industry
30%

Industry in General
Household Appliances

38%

Civil Construction
Distribution
16%
7%

12

Steel Business Unit

Adjusted EBITDA and Adjusted EBITDA Margin - R$ million

18%

17%

13%
11%
10%
7%

4%

4%

7%

7%
3%

514

3%

4%
2%

477

1%
376
308

289
201

189
108
3Q10

4Q10

117

1Q11

83
2Q11

3Q11

74
4Q11

100
1Q12

Adjusted EBITDA

178
57

2Q12

3Q12

20
4Q12

1Q13

Adjusted EBITDA Margin

2Q13

3Q13

4Q13

1Q14
13

Steel Business Unit

Adjusted EBITDA and Adjusted EBITDA Margin - R$ million

3500
21%
3000

17%

16%

16%
2500

2000

10%

1.819

1500

4%

11%

6%

1.151
2%

1000

477

463

500

1%

277
-4%

2010

2011

2012

2013

-500

1Q14
-9%

Adjusted EBITDA

Adjusted EBITDA Margin

Steel Business Unit

Investments Concluded
Hot Strip Mill II and New

Galvanizing Line II - Ipatinga

Pickling Line - Cubato

Exclusive coils dimensions in Brazil

Higher production capacity

Pickled Coils up to 1,800 mm wide

Products portfolio increase

Higher product performance and efficiency

Deep drawing steel

Higher productivity for customers

Products Inovation

High automation and lower electric energy consumption

High-strength steels

High-strength and technology content to the steel products

Excellent flatness

Main Applications

Production capacity of 2,3

million tons per year

Production capacity of 550

thousand tons per year

15

Mining Business Unit

Description

Located in Serra Azul/MG

4 mining sites, acquired from J, Mendes Group in February 2008
Reserves of 2.6 billion tons of iron ore

MRS: 20% of voting shares, being part of the Control Group

Retroarea in Itagua Port
Igarap

So Joaquim
De Bicas

Minerita
MUSA
Central
70.0%

MUSA
Oeste

Arcelor
Mittal

30.0%

MUSA
Leste

Ferrous
(Santanense)

MMX MUSA
Pau de Vinho

Com
isa

Emicon

Ferrous

MBL
Itatiaiuu

Minerao Usiminas
16

Mining Business Unit

Production - Thousand tons

2,036

1,649

1,621

1,618

1,213

1Q13

2Q13

3Q13

4Q13

1Q14

17

Mining Business Unit

Sales Volume - Thousand tons

2,212
168
1,830
0

1,346

1,366

165
48

166

1,133

1Q13

1,765

996

509

787

298

206

994

1,043

1,048

2Q13

3Q13

4Q13

Sales to Usiminas

Sales to 3rd parties - Domestic Market

Exports

957

1Q14
Total

18

Mining Business Unit

Adjusted EBITDA and Adjusted EBITDA Margin - R$ million

58%
53%
49%

144
119

1Q13

2Q13
Adjusted EBITDA

51%
47%

181

175

4Q13

1Q14

139

3Q13

Adjusted EBITDA Margin

19

Mining Business Unit

Adjusted EBITDA and Adjusted EBITDA Margin - R$ million

67%

638

62%

49%

604

51%

51%

582

600

439

175

2010

2011
Adjusted EBITDA

-200

2012

2013

Adjusted EBITDA Margin

1Q14

80%
75%
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
-35%
-40%
-45%
-50%
-55%
-60%
-65%
-70%
-75%
-80%
-85%
-90%
-95%
-100%
-105%
-110%
-115%
-120%
-125%
-130%
-135%
-140%
-145%
-150%
-155%
-160%
-165%
-170%
-175%
-180%
-185%
-190%
-195%
-200%
-205%
-210%
-215%
-220%
-225%
-230%
-235%
-240%
-245%
-250%

Mining Business Unit

Iron Ore Production Capacity Million tons

Friable Project: Completed in 2013

Compact Project:
under detailing phase

29
12
10
8
0

23
2

2011

2012

2013

4
2

21

Mining Business Unit

Retro Area in Itaguai Port

22
22

Steel Processing
Solues Usiminas

Solues Usiminas
10 industrial units in MG, SP, RS, ES, BA
and PE

Recife

Processing capacity of 2 million tons/year

Camaari

Net Revenue of R$563 million in the

1Q14

Betim
Santa Luzia

Serra

Campo Limpo Paulista

Taubat
Guarulhos So Roque
Guarulhos Bonsucesso

Porto Alegre

23

Capital Goods
Usiminas Mecnica

Located in Ipatinga/MG
Market Segments: Steel Structures, Shipbuilding and Offshore, Oil and Gas,
Industrial Equipment, Industrial Assembly, Foundry and Railcars
Net Revenue of R$169 million in the 1Q14

Oil Platform

Braslia 3rd Bridge

24

Agenda

Company
Profile and
Market Data

Usiminas and its

Business Units

Financial
Results
25

Consolidated
Gross Profit, EBIT and Net Income - R$ million

520
455

437

376

336
226

207
163

222
168

142

115
47

-16

-22

-44
4Q12

1Q13

-123

2Q13

3Q13

4Q13

1Q14

-283

Gross Profit

EBIT

Net Income

26

Consolidated
Adjusted EBITDA and Adjusted EBITDA Margin - R$ million

23%

21%
17%
11%

11%

12%

16%

14%

12%
8%

10%
7%

7%

7%
4%

735
655
538

514

3Q13

4Q13

441
332

337

365

343

313
218

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

190
1Q12

Adjusted EBITDA

232

226
150

2Q12

3Q12

4Q12

1Q13

2Q13

1Q14

Adjusted EBITDA Margin

27

Consolidated
Adjusted EBITDA and Adjusted EBITDA Margin - R$ million

3.500

21%

20%

21%

3.000

2.650
2.500

16%

14%
11%

11%
2.000

5%
1.500

1.806
6%

1.264
1%

1.000

655

697

-4%

500

-9%

2010

2011
Adjusted EBITDA

2012

2012
Adjusted EBITDA Margin

1Q14

Consolidated
Cash Position and Debt Profile - R$ million

Duration: R$: 35 months

US$: 34 months

2,914

1,021

1,384
1,113
535

1,893

849

1,246

1,280
282

222

892

493

999

754

931

619

675
4
670

312
Cash

2014

2015

2016

2017

Local Currency

2018

2019

21
2
19
2020

7
0
7
2021 on

Foreign Currency

29

Consolidated
Cash and Indebtedness R$ million

7,851

8,016
7,499
6,903

6,658

4.4
3.2
2.5

4,239

1Q13

1.9

1.7

4,736
3,990

2Q13
Cash

3Q13
Gross Debt

3,469

4Q13

2,914

1Q14

Net Debt/EBITDA (x)

30

Consolidated
Capex Evolution - R$ million

308
22
261
15

238

45

10
175

104

56

238
10

Total

29

Others
Mining
Steel

17

241
112

198

172
142

45
1Q13

2Q13

3Q13

4Q13

1Q14
31

Consolidated
Working Capital - R$ billion

Average
2,6
2.6

3.0
2.8

2.7

2.5
2.2

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14
32

Steel Business Unit

Steel Inventories - Thousand tons

1,031

1,028

1,072

1,059

903

916

54

51

52

59

65

66

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

Inventory
Days

Quarterly Results Accounted

Per Business Unit R$ million

Income Statement per Business Units - Non Audited

R$ million

Mining

Steel*

Steel
Processing

Capital Goods

Adjustment

Consolidated

1Q14

4Q13

1Q14

4Q13

1Q14

4Q13

1Q14

4Q13

1Q14

4Q13

1Q14

4Q13

346

382

2,877

2,824

562

612

169

202

(812)

(828)

3,142

3,193

Domestic Market

234

345

2,575

2,521

557

609

169

190

(812)

(828)

2,723

2,835

Exports

112

38

302

304

12

420

357

COGS

(153)

(200)

(2,539)

(2,600)

(529)

(559)

(151)

(188)

750

790

(2,623)

(2,756)

Gross Profit

192

182

339

225

33

53

18

15

(63)

(38)

520

437

Operating Income
(Expenses)

(41)

(42)

(96)

(158)

(31)

(52)

(16)

(19)

(183)

(269)

EBIT

151

141

242

67

(5)

(62)

(36)

336

168

Adjusted EBITDA

175

181

477

308

12

13

(18)

10

655

514

Adj.EBITDA Margin

51%

47%

17%

11%

2%

2%

5%

1%

21%

16%

Net Revenue

*Consolidates 70% of Unigal

Note: All intercompany transactions are made at arms length,

34

Final Message

Continuous Process of development

2012 2013
Costs
CAPEX
Working Capital

2013 2015
Productivity and operational efficiency
Development of labor force
Focus on the domestic market: greater integration
with customers and development of new products
Leverage reduction
Focus on the core business

35

ADR
Level I

Cristina Morgan C. Drumond

Head of IR
cristina,drumond@usiminas,com
Phone: 55-31-3499,8772
Fax: 55-31-3499,9357

Leonardo Karam Rosa

Diogo Dias Gonalves

Renata Costa Couto

IR Manager
leonardo,rosa@usiminas,com
Phone: 55-31-3499,8550

IR Manager
diogo,goncalves@usiminas,com
Phone: 55-31-3499,8710

IR Analyst
r,couto@usiminas,com
Phone: 55-31-3499,8619

www,usiminas,com/ri

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,