Presentation

Apresentao Usiminas
2T11 - APIMEC
1Q16
Classification of the information: Confidential

Agenda

Usiminas
Profile

Market
Outlook

Usiminas and its

business units

Financial
Results

Company Profile

Complete solution for products and services

Steel company with the largest number of patents rights in Latin America
Largest Research Center in the steel sector in Latin America
First Brazilian steel company to have its quality system certified by ISO 9001 in 1992
First Brazilian steel company and second in the world to achieve the ISSO 14001 environmental

management certificate in 1996

Founded of the most enduring environmental education project of the private sector since 1984

Timeline

Operation
Start Up

1962

Cosipa
privatization

1991

Usiminas
privatization
Listing on
BOVESPA

1993

Listing on
LATIBEX
stock
exchange
section

1994

Listing on
ADR I on
the OTC
Market
(New York)

2005

Creation of
Solues
Usiminas
One CNPJ:
Usiminas
incorporates
Cosipa

2008

Acquisition
of iron ore
mines
Acquisition
of
Zamprogna

2009

Selling of
Ternium stake
Joint Mining
Agreements
with MBL e
Ferrous

Automotiva
Usiminas
Divestment

2011

2013

2010

Creation of
Minerao
Usiminas
Acquisition
of Codeme
and Metform
stake

2012

Entrance of
Ternium /
Tenaris into
Usiminas
Control Group
(New
shareholders
agreement)

Temporary
shutdown
of the
primary
areas in
Cubato

2014

2015

Friables
Project
conclusion on
Mining
(increasing
the capacity
to 12 million
tons/year )

2016

Approval of
the R$ 1
billion
capital
increase

Shareholding Composition

Total Capital
1,013,786,190
Voting Capital
ON 49.84%

36.14%

29.45%

505,260,684

PN 50.16%

508,525,506

Nippon Group
Ternium / Tenaris

Control Group (63.86%)

Usiminas Pension Fund

Free Float

6.75%

27.66%

Usiminas shares are traded on BM&FBovespa (So Paulo), on the OTC

Market (New York) and on a LATIBEX exchange section (Madrid).
5

Complete Solution for Products and Services

Business Units

Steel Processing
Steel

Solues Usiminas

Capital Goods
Usiminas Mecnica

Ipatinga Plant
Cubato Plant

Mining

Unigal Usiminas

Minerao Usiminas

UPSTREAM

DOWNSTREAM

Strategically Located

Mining
Steel
Steel Processing
Capital Goods
7

Shares Quotation on BM&FBOVESPA

R$/share - Up to 03/31/2016

25.13

24.44
22.21
18.26

21.93

21.41

21.78

17.53
11.80
10.45

12.40

8.81

11.62

10.12

6.72

12.30
10.52

10.55
4.02

6.15
2.59

2004

5.05

3.67

2005

2006

2007

2008

2009

2010

2011

USIM3
Note: The prices are adjusted by removing the effects of events such as Bonus and Unfolding

2012

2013

2014

1.55

2015

4.09

1.81

1Q16

USIM5
8

Agenda

Usiminas
Profile

Market
Outlook

Usiminas and its

business units

Financial
Results

World Crude Steel Market in 2015

Million Tons

China
Japan

803.8
105.2

USA

78.9

India

89.6

South Korea

69.7

Russia

71.1

Germany

42.7

Turkey

31.5

Brazil

33.2

Ukraine

22.9

Source: World Steel Association

Excess of Capacity
704

Capacity
2,351

Production
1,647
10

World Crude Steel Production

2014

2003

20%

24%

European Union

18%

10%
2%

8%

Europe (Others)
2%

Others
North America

7%

South America
12%

3%
1%

Africa
China
Asia and Oceania*

23%
13%

50%

2% 4%

971 million tons

1,665 million tons

*Except China
Source: World Steel Association

11

Largest Producers in 2014

Thousand Tons

World Crude Steel Producers

1

ArcelorMittal

Nippon Steel & Sumitomo Metal Corporation

Hebei Steel Group

Baosteel Group

Wuhan Steel Group

POSCO

Shagang Group

Ansteel Group

Shougang Group

10

JFE

62

Usiminas

Source: World Steel Association/ Instituto Ao Brasil

Brazilian Flat Steel Producers

6,054

5,368
4,456

745
34
Usiminas

ArcelorMittal

CSN

Aperam

Gerdau

12

Brazilian Flat Steel Market

Million Tons
22%
14%

11%

5%

12%

15%

15.2
14.5

14.3
13.1

14.3
13.6

14.9

14

15.014.8

14.3
13.2

13.4

11.9
10.7

10.2

2007

15%

7%

15.7
12.5

13%

2008

2009

2010

Production
Source: Instituto Ao Brasil / Usiminas Excludes Slabs

2011

2012

Consumption

2013

2014

2015

Imports
13

Flat Steel Consumption Markets

Auto Industry
and Autoparts

Household
Appliances

Agricultural and
Road Machinery

Hot Rolled,
Cold Rolled and
Galvanized

Cold Rolled and

Galvanized

Heavy Plates and

Hot Rolled

Civil
Construction

Heavy Plates,
Hot Rolled,
Cold Rolled and
Galvanized

Oil and Gas

Pipelines

Heavy Plates and

Hot Rolled

Heavy Plates and

Hot Rolled

14

Agenda

Usiminas
Profile

Market
Outlook

Usiminas and its

business units

Financial
Results

15

Flat Steel Capacity of Production

Thousand Tons

Galvanized
Slab Caster

Slabs
Placas

Heavy Plates

Hot Coils
Laminados a
Quente
3,600

Ipatinga Plant

5,000

1,000

Cubato Plant

4,500*

1,000**

Nominal
Capacity

9,500*

2,000*

1,900

Optimized
Rolling
Capacity

* Temporary shutdown of the primary areas of Cubato

** Temporary shutdown of the rolling mills

Cold Coils

EG
Eletrogalvanizados

HDG

2,500

360

1,200

8,000

3,700

360

1,050

4,200

2,200

350

1,020

2,100 **
2.300

1,050
-

16

Sales Volume
Steel Business Unit Thousand Tons

1,256

1,275
1,205

1,179

12%
33%

27%
36%

12%

15%

903
16%

24%
19%

12%

88%
88%

1Q15

67%
85%

2Q15

73%

64%
76%

81%

3Q15
Domestic Market

4Q15

88%84%

1Q16

Exports
17

Exports Main Markets

Steel Business Unit

4T15
8%
5%

1Q16

18%

5%

5%

2%
5%
2%
25%

6%

5%

7%

16%

6%

10%
11%

20%
13%
13%

19%

China

Turkey

Argentina

Germany

USA

Taiwan

India

United Kingdom

Vietnam

Spain

Mexico

Italy

Portugal

Others

18

Cost of Goods Sold - COGS

Steel Business Unit

1T16

4Q15
5.3%

3.4%

2.3%

7.1%

6.6%

18.8%

18.9%

8.0%

7.8%
8.3%
13.1%

14.8%

10.3%

8.9%

10.0%

12.6%

9.2%

12.7%

11.0%

10.9%

Labor (direct and indirect)

Coal and Coke

Other Raw Materials

Energy and Fuels

Inventories Variation

Iron Ore and Pellets

Depreciation

Structural Expenses

Spare Parts

Others

19

Adjusted EBITDA and EBITDA Margin

Steel Business Unit R$ Million

13%
337
19

9%

206
31
6

3%
46
1
(6)
(82)
-4%

72
(37)
(52)
(2)
(179)
-8%

1Q15
Assets Sale/
Write-off

2Q15
Sales of Surplus
Electric Energy

3Q15

4Q15
Adjusted EBITDA

1Q16
Adjusted EBITDA
Margin

20

Investments
Steel Business Unit

Heavy Plates

Hot dip galvanized

Hot Rolled

Slabs

Electrogalvanized

Cold Rolled

Capacity increase to generate finished products

7.2 million t
(2010)

9.7 million t
(2014)

21

Description
Mining Business Unit

Located in Serra Azul/Minas Gerais state

4 mining sites, acquired from J. Mendes in February, 2008

Reserves of 2.6 billion tons of iron ore

It has 20% of voting shares of MRS Logistica, being part of the Control Group

Retroarea in Itagua Port

Shareholder Composition

Production Capacity
Lump
2 million

70%

Sinter Feed
4 million
30%

Pellet Feed
6 million

22

Location
Mining Business Unit

Igarap

So Joaquim
De Bicas

Minerita
MUSA
Central
MUSA
Oeste

Arcelor
Mittal

MUSA
Leste

Ferrous
(Santanense)

MMX

Comisa

Emicon

MUSA
Pau de Vinho

Ferrous

MBL

Itatiaiuu

Minerao Usiminas
23

Retroarea in Itaguai Port

Mining Business Unit

24

Sales Volume
Mining Business Unit Thousand Tons

1,206
1,139
91

135
975

775
41

1,048

670
12

16

658

615

4Q15

1Q16

1,071
734

1Q15

344

2Q15
Sales to Usiminas

3Q15

Sales to 3rd parties - Domestic Market

Exports
25

Iron Ore Price PLATTS (62% Fe CFR China)

US$/ton

62

1Q15

58

2Q15

55

3Q15

47

48

4Q15

1Q16
26

Adjusted EBITDA and EBITDA Margin

Mining Business Unit R$ million

43
36%
(6)

(12)

(24)

-5%

(102)

-27%

-11%

-119%
1Q15

2Q15

Adjusted EBITDA

3Q15

4Q15

1Q16

Adjusted EBITDA Margin

27

Description
Solues Usiminas - Steel Processing

8 industrial units in different Brazilian states:

MG, SP, RS, ES, BA and PE

Processing capacity of 2 million tons of

steel/year

Recife

Net Revenue of R$1.9 billion in 2015

Betim
Santa Luzia

Serra

Taubat
Guarulhos
So Paulo

Porto Alegre

28

Description
Usiminas Mecnica - Capital Goods

Facilities in Ipatinga/Minas Gerais state, Congonhas/Minas Gerais state and in

Cubato/So Paulo state

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

Net Revenue of R$869 million in 2015

Steel Structures

Braslia 3rd Bridge

29
29

Agenda

Usiminas
Profile

Market
Data

Usiminas and its

business units

Financial
Results

30

Adjusted EBITDA and EBITDA Margin

Consolidated R$ million
380
28
14%
227
41
4
8%
52 3%

(2)
(11)
-3%

(1)
(50)

72
(41)

(65)
-10%

(250)

1Q15
Assets Sale/
Write-off

2Q15
Sales of Surplus
Electric Energy

3Q15

4Q15
Adjusted EBITDA

1Q16
Adjusted EBITDA
Margin

31

Comparing Adjusted and CVM 527 EBITDA

Consolidated R$ Thousand

32

Cash Position and Debt Profile

Consolidated R$ million

1.736

1.776

1.768

610

580

Debt Duration:

1.815

R$: 28 meses
US$: 24 meses

140

1,479

1.009
75

861

1,595
1,166

1,187

545
934

336
Caixa

2016

2017

2018

Moeda Local

2019

316

13

2020

0
13
2021

Moeda Estrangeira

11

0
11
2022

30
0
30
a partir de
2023
33

Cash and Indebtedness

Consolidated - R$ million

7,974
7,023

4,402

7,705

7,473

4,584

2,621

2,889

1Q15

2Q15
Gross Debt

5,577

5,681

7,282

5,547

2,397

2,024

1,736

3Q15

4Q15

1Q16

Net Debt

Cash
34

CAPEX
Consolidated - R$ million
1,643
112

555
981
64

1,110
52
94
784
50
112

317

976

964

622

600

2
2012

2013
Others

2014
Mining

2015

70
64 4

1Q16

Steel
35

G&A Evolution
Consolidated - R$ million

4.6%

4.5%
4.2%

4.0%

4.4%

122
108

1Q15

101

2Q15

3Q15
G&A

109
90

4Q15

1Q16

G&A/Net Revenues
36

Working Capital
Consolidated R$ billion

2.7

1Q15

2.7

2Q15

2.4

2.3

3Q15

4Q15

2.2

1Q16
37

Working Capital Steel Inventories

Thousand Tons

Inventory
turnover
(days)

933

911

747
639
485

67

64

57

48

48

1Q15

2Q15

3Q15

4Q15

1Q16
38

Income Statement
Per Business Unit R$ million

Note: All intercompany transactions are made at arms length basis

39

Financial Reconfiguration

Standstill agreement with the main creditors signed in March/16 for

120 days;
Capital increase duly approved at R$1 billion;
Access to Usiminas Mining cash (Intercompany Loan / capital reduction);

Debt renegotiation for a new profile of the principal and maturities to

the generation of the Company's cash;
Sale of assets.

40

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

ADR
Level I
Declarations relative to business and 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.