Usiminas Results Apresentao Usiminas 2T11 - APIMEC 2Q13

Information Classification: Public

Agenda

Company Clique para Profile and editar o texto Market mestre Data

Usiminas and its Business Units

Operational Improvement and Financial Results

2

Time Line and Shareholder Composition

2013 2012 2011 2010

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 New shareholders agreement signed among Nippon Group, Ternium / Tenaris and Usiminas Pension Fund until 2031 Sale of Automotiva Usiminas *

2009 2008
2005 1991 1956
Foundation of Usiminas 1962Operation Start Up Listing on Latibex

Aquisition of J. Mendes iron ore mines

Aquisition of Zamprogna

Privatization Usiminas:1991 Cosipa: 1993

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

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

Strategically Located

Mining Steel Steel processing Capital Goods

Complete Solution of Products and Services

DOWNSTREAM

Steel Processing

Capital Goods

Steel

Mining

Solues Usiminas Metform and Codeme stake Ipatinga

Usiminas Mecnica

UPSTREAM

Cubato
Minerao Usiminas Unigal Usiminas

World Crude Steel Production in 2012

Million tons

China Japan USA India Russia South Korea Germany Turkey Brazil Ukraine
Source: World Steel Association

708.8 107.2

88.6 76.7 70.6 69.3 42.7 35.9 34.7 32.9

Excess of Capacity 542 Excess of Production 139

Capacity 2,090

Production 1,548

Consumption 1,409
6

Flat Steel Brazilian Market

Million tons

Production

Apparent Consumption

3.8

3.9

3.9

3.9

3.6

3.7

3.5

3.5

3.6

3.7
3.4 3.4

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

Inventories in the Distribution Network

Million tons Monthly basis

Imports (thousand tons) 3.1

3.0 2.0

.2

2.8

2.8

2.7

2.6

2.8

519 413
1.0

512 335 319

323

.1

.0

.9

.8

1.0 1Q12

1.0 2Q12

1.0 3Q12

.7

0.9 4Q12

1.0 1Q13

1.1

0.0 -1.0 -2.0 -3.0

.6

2Q13

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13
7

Source: IABR / INDA / Usiminas

Agenda

Company Profile and Market Data

Usiminas and its Business Units

Operational Improvement and Financial Results

8

Steel Business Unit

Flat steel production

Installed Nominal Capacity : 9.5 million tons / year

Galvanized
Slab Caster
Ipatinga Plant

Slabs
5,000,000tons

Heavy Plates
1,000,000tons

Hot Coils
3,600,000tons

Cold Coils
2,500,000tons

EG
360,000tons

HDG
1,050,000tons

Cubato Plant Nominal Capacity Optimized Rolling Capacity

4,500,000tons

1,000,000tons

4,400,000tons

1,200,000tons

9,500,000tons

2,000,000tons

8,000,000tons

3,700,000tons

360,000tons

1,050,000tons

1,900,000tons

3,200,000tons

1,950,000tons

350,000tons

1,020,000tons

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

Crude steel production Thousand tons

1,783 1,858 1,549 1,509

1,672

1,845 1,837 1,804

1,662

1,749
Ipatinga

Cubato

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

11

Steel Business Unit

Sales Thousand tons

Sales Breakdown by Segments 2Q13

561 266 487 522 365 144

31%

18%
1,246 1,327 1,262 1,209 1,226

1,428

35%

6% 9%

Auto Industry Industry Household Appliances Civil Construction Distribution

1Q11

2Q11

3Q11

4Q11

1Q12
Exports

2Q12

Domestic Market

12

Adjusted EBITDA/ Adjusted EBITDA Margin

Steel Business - R$ Million

Steel business Adjusted EBITDA is back to 2 digits

10%
7% 4% 3% 189 117 83 74 3% 4% 2% 201 1% 178 7% 7% 289

100 57 20

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

Adjusted EBITDA

Adjusted EBITDA Margin

13

Steel Business Unit

Concluded investments

Hot Strip Mill II - Cubato

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

Galvanizing Line II - Ipatinga

Higher production capacity Products portfolio increase Deep drawing steel Products Inovation High-strength steels Excellent flatness Main Applications

Production capacity of 2.3 million tons per year

Production capacity of 550 thousand tons per year

14

Mining - Minerao Usiminas

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 Life time until 2045

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

Retroarea in Itagua Port
Igarap So Joaquim De Bicas

Minerita
70.0%

MUSA Central MUSA Oeste

30.0%

MUSA Leste

MMX MUSA Pau de Vinho Ferrous

Arcelor Mittal MBL Itatiaiuu

Ferrous (Santanense)

Com isa

Emicon

Minerao Usiminas

15

Mining - Minerao Usiminas

Thousand tons

Production:
1,854 1,517 1,785 1,496 1,649 1,621

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

Sales:
1,730 1,747

1,497
1,142

1,346

1,366

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13 16

Mining - Minerao Usiminas

Investment Plan

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

Friable Project: ongoing Estimated Capex of R$800 million

Compact Project: under detailing phase

17

Retroarea in Itagua Port

18 18

Steel Processing
Solues Usiminas and Automotiva Usiminas

Solues Usiminas
10 industrial units in MG, SP, RS, ES, BA and PE Processing capacity of 2 million tons/year Net Revenue of R$998 million in the 1H13
Camaari Recife

Automotiva Usiminas
In the 2Q13, Usiminas entered into an Agreement with Aethra Sistemas Automotivos S.A., for the amount of R$210 million (enterprise value) to transfer 100% of its shares. The transaction conclusion is conditioned to the approval of CADE (Brazilian Antitrust Regulator) and is aligned with the Companys strategy to focus on its core business, in order to maximize its competitive positioning
Betim Santa Luzia Campo Limpo Paulista Taubat Guarulhos So Roque Guarulhos Bonsucesso Serra

Porto Alegre

Automotiva Solues Usiminas

19

Capital Goods
Usiminas Mecnica
Braslia 3rd Bridge

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

Market Segments: Steel Structures, Shipbuilding and Offshore, Oil and Gas, Industrial Equipment, Industrial Assembly, Foundry and Railcars
Net Revenue of R$524 million in the 1H13
Platform

Ship Panel

20 20

Agenda

Company Profile and Market Data

Usiminas and its Business Units

Operational Improvement and Financial Results

21

Increasing Coke Production

Coke Plant #3 (Ipatinga) Thousand tons

+10.1%
Average 2011: 61.6 Average 2012/2013: 67.8

55.3 54.6

60.3 58.8

61.9

64.1

67.3 67.5

63.7 63.5

59.0

63.1

66.2

62.2

65.3 65.8

69.0 68.5 67.0 68.8 68.0 66.5 69.2 66.1 68.1

69.8 61.5

67.2

69.3

67.1

22

Improving Continuous Casting Productivity

Increasing slabs production Thousand tons

Slab Production
+4.7% 557

583

6 CCs 8 CCs

1Q12 2012 First Quarter

Last two2Q13 months 2012

23

Adjusted EBITDA - Consolidated

R$ million

500

14% 11% 12% 12% 10% 8% 7% 7% 4% 7% +41%

15%

450

10%

400

350

5%

300

441
250

0%

337
200

365

343 218 232 226

313
-5%

150

190 1Q12

150
-10%

100

1Q11

2Q11

3Q11

4Q11

2Q12

3Q12

4Q12

1Q13

2Q13

Adjusted EBITDA

Adjusted EBITDA Margin

24

Working Capital
Consolidated / Steel Business

R$2.6 billion Reduction

4.8
2.6 2.7 2.2

Dec/11

Dec/12

Mar/13

Jun/13

Reduction of 596 thousand tons in inventories 1,512 1,031 102 54

903 51

916 52 Inventory days

4Q11

4Q12

1Q13

2Q13
25

Capex Performance Consolidated

Strict CAPEX control - R$ million

3,192 81 41

- 22% 261 2,490 276 365 1,652 112 555 1,849 985 45 175 17 112 142 104 - 34% 15

3,070

2010

2011

2012

1Q13

2Q13

Steel

Mining

Others

Total
26

Debt Profile and Cash Position - Consolidated

R$ million

4,736

1,932

2,804

1,359 411

1,288 386
902
2015

1,498 765 733

2016

1,296 265 1,031

1,409 1,108 301 674 3 671

2019

466 272 194

Cash 2013

948
2014

2017

2018

2020 on

27 2 25

Local Currency

Foreign Currency

27

Net Debt - Consolidated

R$ Million

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

3,611 3,410 -9% 3,280

2012

1Q13 Net debt

2Q13

28

Quarterly Results Accounted

Per Business Unit

Income Statement per Business Units - Non Audited

R$ million Mining
2Q13 1Q13 248 207 41 (86) 162 (29) 133 144 58%

Steel*
2Q13 2,898 2,683 215 (2,707) 190 (141) 50 289 10% 1Q13 2,666 2,223 442 (2,590) 75 (134) (58) 178 7%

Steel Processing
2Q13 639 634 5 (570) 68 (49) 19 33 5% 1Q13 546 538 8 (495) 51 (48) 3 16 3%

Capital Goods
2Q13 265 265 0 (249) 16 (22) (6) 1 0% 1Q13 259 259 0 (249) 10 (14) (4) 2 1%

Adjustment
2Q13 (780) (780) 0 749 (31) 1 (30) (1) 1Q13 (524) (524) 0 433 (91) 1 (90) (27) -

Consolidated
2Q13 3,244 2,992 252 (2,868) 376 (234) 142 441 14% 1Q13 3,195 2,703 491 (2,988) 207 (224) (16) 313 10%

Net Revenue Domestic Market Exports COGS Gross Profit Operating Income (Expenses) EBIT Adjusted EBITDA Adj.EBITDA Margin
* Unigal 70%

223 191 33 (90) 133 (24) 109 120 54%

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

29

Results Accounted in the Semester

Per Business Unit

Income Statement per Business Units - Non Audited

R$ million Mining
1H13 1H12 452 361 92 (173) 279 (85) 195 211 47%

Steel*
1H13 5,563 4,906 657 (5,297) 266 (274) (8) 467 8% 1H12 5,670 4,582 1,088 (5,631) 39 (143) (104) 301 5%

Steel Processing
1H13 1,185 1,172 13 (1,066) 119 (97) 22 49 4% 1H12 1,029 1,012 17 (943) 87 (101) (15) 11 1%

Capital Goods
1H13 524 524 0 (499) 26 (36) (10) 3 1% 1H12 456 454 2 (483) (27) (40) (66) (54) -12%

Adjustment
1H13 (1,305) (1,305) 0 1,182 (122) 2 (120) (27) 1H12 (1,494) (1,462) (32) 1,387 (107) 4 (104) (46) -

Consolidated
1H13 6,439 5,696 743 (5,856) 583 (458) 126 755 12% 1H12 6,114 4,946 1,168 (5,843) 271 (365) (94) 422 7%

Net Revenue Domestic Market Export Market COGS Gross Profit Operating Income (Expenses) EBIT EBITDA EBITDA Margin
* Unigal 70%

471 397 74 (176) 295 (53) 242 263 56%

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

30

Results achieved in the 2Q13

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

31

Final Message

Fase I

Control
Continuous

Costs CAPEX Working Capital Productivity Increase Industrial Engineering Benchmarking Operational Efficiency Domestic Sales Increase Leverage Reduction Companys Profitability Recovery
32

Process Fase II

Improvement

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

leonardo.rosa@usiminas.com Phone: 55-31-3499.8550

Diogo Dias Gonalves

diogo.goncalves@usiminas.com Phone: 55-31-3499.8710

Luciana Valadares dos Santos

luciana.santos@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.