Usiminas Results 4Q12 and 2012 Apresentação Usiminas 2T11 - APIMEC Information Classification: Public
2 Agenda Clique para Profile editar o and texto Markets mestre Usiminas and its Business Units Operational Improvements and Financials Results
Time Line and Shareholder Composition 2012 1956 Foundation of Usiminas 1962- Operation Start Up 1991 Privatization Usiminas:1991 Cosipa: 1993 2005 Listing on Latibex 2008 Aquisition of J. Mendes iron ore mines Aquisition of Zamprogna 2009 Foundation of Soluções Usiminas due the consolidation of the companies Rio Negro, Dufer, Fasal and Zamprogna, Usial and Usicort Single CNPJ: Cosipa is incorporated by Usiminas 2010 Creation of Mineração Usiminas Partnership with Codeme and Metform 2011 Entrance of Ternium/ Tenaris Selling of Ternium in Usiminas shares Control Group Joint Mining and Cooperation Agreement with MBL and Ferrous Commercials Agreements with MMX to explore Pau de Vinho and to use the Southest Port Negociation with J. Mendes concluded New shareholders agreement singned among Niippon Group, Ternium / Tenaris and Usiminas Pension Fund until 2031 Acquisition of the former Litigation Area 3
4 Strategically Located Mining Steel Steel processing Capital Goods
UPSTREAM DOWNSTREAM Complete Solution of Products and Services Steel Processing Capital Goods Steel Mining Soluções Usiminas * Usiminas Mecânica * Automotiva Usiminas * Ipatinga Metform and Codeme stake ** Cubatão Mineração Usiminas * Unigal Usiminas * * Controled by Usiminas ** Results accounted through equity income 5
World Crude Steel Production in 2012 Million tons China 708.8 Japan 107.2 USA 88.6 India 76.7 Russia 70.6 South Korea 69.3 Germany Turkey Brazil Ukraine 42.7 35.9 34.7 32.9 Capacity 2,090 Excess of Capacity 542 Production 1,548 Excess of Production 139 Consumption 1,409 Source: World Steel Association 6
Flat Steel Brazilian Market Million tons Production Apparent Consumption 15.6 14.0 15.4 14.5 13.6 14.0 2010 2011 2012 Inventories in the Distribution Network 2010 2011 2012 Imports * Million Tons Monthly basis 2.8 2.8 2.7 2.6 1.0 1.0 1.0 0.9 3,145 1,929 1,779 1Q12 2Q12 3Q12 4Q12 2010 2011 2012 Source: IABR / INDA / Usiminas * Estimated 7
8 Agenda Profile and Markets Usiminas and its Business Units Operational Improvements and Financials Results
9 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 HDG Ipatinga Plant 5,000,000tons 1,000,000tons 3,600,000tons 2,500,000tons 360,000tons 1,050,000tons Cubatão 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 Optimized Rolling Capacity - 1,900,000tons 3,200,000tons 1,950,000tons 350,000tons 1,020,000tons
10 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
Steel Business Unit Crude steel production Thousand tons Annual 5,637 7,299 6,699 7,158 2009 2010 2011 2012 Quarterly 1,783 1,858 1,549 1,509 1,672 1,845 1,837 1,804 Ipatinga Cubatão 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 11
12 Steel Business Unit Sales Thousand tons Exports Domestic Market 5,631 1,588 4,043 6,565 6,881 1,651 5,916 1,045 1,837 4,914 4,871 5,044 1% 3% 7% 8% 23% 10% 14% 18% 16% Sales Breakdown by Segments 2012 Distributors Auto Parts Auto Industries Industrial Equipment Civil Construction Small Diameter Tubes Household Appliances Rolled Machinery 2009 2010 2011 2012 Other
13 Steel Business Unit Concluded investments Hot Strip Mill II - Cubatão 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 Bigger production capacity Increase in products portfolio 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
Mining - Mineração 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 Itaguaí Port Igarapé São Joaquim De Bicas 70.0% MUSA Central Minerita MUSA Leste MMX MUSA Pau de Vinho 30.0% MUSA Oeste Arcelor Mittal Ferrous (Santanense) Com isa Emicon Ferrous MBL Itatiaiuçu Mineração Usiminas 14
15 Mining - Mineração Usiminas Million tons Production: 5.5 6.8 6.3 6.7 3.8 2008 2009 2010 2011 2012 Sales: 4.2 5.3 6.0 5.6 6.1 2008 2009 2010 2011 2012
16 Mining - Mineração 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 Itaguaí Port
Steel Processing Soluções Usiminas and Automotiva Usiminas Soluções Usiminas 11 industrial units in MG, SP, RS, ES, BA and PE Processing capacity of 2 million tons/year Net Revenue of R$1.7 billion in 2012 Camaçari Recife Automotiva Usiminas Located in Pouso Alegre/MG, close to major auto makers Offers wide solutions to the Automobile Industry Net Revenue of R$291.8 million in 2012 Santa Luzia Campo Limpo Paulista Betim Taubaté Guarulhos São Paulo Cachoeirinha Porto Alegre Serra Automotiva Soluções Usiminas 18
Capital Goods Usiminas Mecânica Located in Ipatinga/MG, It is one of the largest capital goods companies in Brazil Brasília 3rd Bridge Market Sectors: Steel Structures, Shipbuilding and Offshore, Oil and Gas, Industrial Equipment, Industrial Assembly, Foundry and Railcars Net Revenue of R$1.0 billion in 2012 Platform Ship Panel 19
20 Agenda Profile and Markets Usiminas and its Business Units Operational Improvements and Financials Results
21 Increasing Coke Production Coke Plant #3 (Ipatinga) Thousand tons Average 2011: 61.6 +8.4% Average 2012: 66.8 55.3 54.6 60.3 58.8 61.9 64.1 67.3 67.5 63.7 63.5 59.0 63.1 66.2 62.2 65.3 65.8 68.5 67.0 68.8 68.0 66.5 69.2 66.1 68.1
Lower Cost Iron Ore Blend Blast Furnaces (Cubatão) Thousand tons Pellet Metallic burden optimization in Blast Furnaces in Cubatão 103 120 148 86 78 0 0 0 0 Apr/12 May/12 Jun/12 Jul/12 Aug/12 Sep/12 Oct/12 Nov/12 Dec/12 Lump 146 137 93 132 162 186 224 203 183 Apr/12 May/12 Jun/12 Jul/12 Aug/12 Sep/12 Oct/12 Nov/12 Dec/12 22
23 Cost Reduction with Natural Gas Utilization US$/ ton 9.0 10.9 4.9 4.6 1.8 2.1 3.6 2.3 2.5 2.3 3.2 0.2-0.3
24 Improving Continuous Casting Productivity (CC) Increasing slabs production Thousand tons Slab Production +7.9% 601 557 8 CCs 6 CCs First 1Q2012 Quarter 2012 Last two 4Q2012 months 2012
25 Net Revenue - Consolidated R$ million 10,924 12,962 11,902 12,709 2009 2010 2011 2012
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 26 EBITDA - Consolidated R$ million Annual 35% 36% 38% 4,368 5,003 6,008 16% 20% 1,716 2,650 11% 1,264 6% 798 2006 2007 2008 2009 2010 2011 2012 Quarterly 12% 11% 12% EBITDA EBITDA Margin 337 365 343 8% 7% 7% 7% 218 190 232 4% 150 226
Working Capital R$ billion (Consolidated) / Thousand tons (Steel Business) 5.4 5.3 5.2 5.0 4.7 4.3 R$ 2.2 billion Reduction 3.8 3.3 2.6 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1,513 1,491 Reduction of 482 mil thousand tons in inventories 1,281 1,126 1,031 90 80 62 55 51 4Q11 1Q12 2Q12 3Q12 4Q12 Inventories Inventories in days 27
28 Capex Evolution Consolidated R$ million 3,192 81 41-22% 2,490 276-34% 3,070 365 1,849 1,652 112 555 985 2010 2011 2012 Steel Mining Others
29 Leverage Consolidated Basis R$ billion 1.0 1.6 2.8 2.5 3.4 3.1 3.6 3.9 3.9 4.2 5.2 4.2 4.1 4.7 3.7 2.3 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Net Debt Net Debt/EBITDA (x)
30 Debt Profile and Cash Position - Consolidated R$ million 4,718 1,708 Duration: R$: 2.6 years US$: 3.1 years 1,723 1,593 3,010 1,418 1,490 1,353 631 638 495 734 683 1,037 1,092 955 273 923 35 151 756 410 316 2 1 33 150 Cash 2013 2014 2015 2016 2017 2018 2019 2020 on Local Currency Foreign Currency
Quarterly Results Accounted Business Unit R$ million Mining Steel Steel Processing Capital Goods Adjustment Consolidated 4Q12 3Q12 4Q12 3Q12 4Q12 3Q12 4Q12 3Q12 4Q12 3Q12 4Q12 3Q12 Net Revenue 292 154 2,827 2,955 508 540 257 305 (676) (564) 3,208 3,390 Domestic Market 213 95 2,188 2,284 502 532 257 305 (676) (533) 2,484 2,683 Exports 79 59 639 671 6 8 0 0 (0) (31) 724 707 COGS (108) (61) (2,908) (2,950) (464) (481) (237) (278) 673 546 (3,044) (3,224) Gross Profit 184 93 (81) 5 44 59 20 27 (4) (18) 163 166 Operating Income (Expenses) (20) (47) (140) (187) (30) (52) (18) 2 (0) (0) (208) (284) EBIT 164 46 (221) (182) 14 7 2 29 (4) (18) (45) (118) EBITDA 173 56 20 57 28 20 8 36 (3) (19) 226 150 EBITDA Margin 59% 36% 1% 2% 6% 4% 3% 12% - - 7% 4% Note: All transactions among the business units are made at market price. MRS results are accounted through equity on Equity Income. 31
Annual Results Accounted Business Unit Income Statement per Business Units - Non Audited - 2012 R$ million Mining Steel Steel Processing Capital Goods Adjustment Consolidated 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 Net Revenue 898 974 11,453 10,421 2,077 2,149 1,017 1,419 (2,736) (3,061) 12,709 11,902 Domestic Market 669 822 9,054 9,047 2,046 2,107 1,015 1,418 (2,673) (3,049) 10,111 10,345 Export Market 229 152 2,399 1,374 31 42 2 1 (63) (12) 2,598 1,557 COGS (342) (270) (11,489) (10,231) (1,887) (1,977) (997) (1,235) 2,667 3,105 (12,048) (10,608) Gross Profit 556 704 (36) 190 190 172 20 184 (70) 44 660 1,294 Operating Income (Expenses) (151) (138) (470) (244) (183) (192) (56) (99) 0 5 (860) (668) EBIT 405 566 (506) (54) 7 (20) (36) 85 (70) 49 (200) 626 EBITDA 439 604 378 463 60 41 (11) 112 (68) 44 798 1,264 EBITDA Margin 49% 62% 3% 4% 3% 2% -1% 8% - - 6% 11% Note: All transactions among the business units are made at market price. MRS results are accounted through equity on Equity Income. 32
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 Gonçalves 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 Management s expectations in relation to future performance. These expectations are highly dependent on market behavior, on Brazil s economic situation, on the industry and on international markets, and are therefore subject to change.