Usiminas Presentation 2Q12

Usiminas Presentation 2Q12

2 Agenda Clique para Market editar o texto Overview mestre Usiminas and its Business Units Financial Highlights

World Production - 2011 Total 1,527 million tons Production per Company 2011 683.3 Arcelor Mittal Hebei Group Baosteel Posco Wuhan Group Nippon Steel Shagang Group Shougang Group JFE Ansteel Group 44.4 43.3 39.1 37.7 33.4 31.9 30.0 29.9 29.8 97.2 36º - Techint Group 51º - Usiminas 9.5 6.8 107.6 86.2 72.2 68.7 68.5 44.3 35.3 35.2 34.1 China Japan USA India Russia South Korea Germany Ukraine Brazil Turkey Source: World Steel 3

4 World Production and capacity of crude steel World - 2011 Excess of Capacity Excess of production Capacity of Crude Steel 461 million tons Production of Crude Steel 149 million tons 1,988 million tons Production 1,527 million tons Consumption 1,527 million tons 1,378 million tons

Value Transfer on the Steel Chain Profit distribution on the steel production chain % 7 15 18 18 13 9 9 12 14 21 22 22 17 21 10 18 39 31 32 78 61 68 76 83 61 57 72 26 41 39 35 28 29 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Steel Iron Ore Coal Source: Mckinsey 5

Brazilian Market Flat Steel Production million tons Apparent Consumption million tons 3.5 3.7 3.8 4.1 4.0 3.7 3.8 3.7 3.3 3.2 3.8 3.9 2.7 2.9 3.4 3.9 3.3 3.1 3.1 3.3 3.2 3.0 3.5 3.5 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Inventories in the Distribution Network Flat Steel Imports thousand tons Thousand tons Monthly basis 2.4 2.6 2.4 0.8 0.8 0.8 3.2 1.0 3.9 4.1 3.2 3.6 3.0 2.9 2.8 2.8 1.2 1.2 1.2 1.2 1.1 1.0 1.0 1.0 315 283 667 790 823 865 416 415 570 500 520 413 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Source: IABR / INDA 6

Importation (thousand tons) 476 416 347 306 298 333 356 364 292 297 Average 2011: 177 thousand tons Average1H11: 161 thousand tons 240 228 229 216 199 158 169 158 143 145 141 129 167 164 168 122 126 184 Source: Usiminas - Sistema Aliceweb - MDIC/Secex 7

Brazil s Production and Sale of vehicles Brazilian Production of vehicles 3,382 3,406 3,455 3,591 3,051 3,075 2,822 +10% +1% +1% +4% +8% +1% 2007 2008 2009 2010 2011 2012p 2013p Nacional Sales Export Sales 2,855 2,652 2,775 2,897 3,024 2,445 2,186-3% 4% +12% +9% +8% 4% 277 489 375 +35% +30% +35% 660 +30% 858 +10% 945 +10% 1,040 2007 2008 2009 2010 2011 2012p 2013p 2007 2008 2009 2010 2011 2012p 2013p Source: 2007 a 2011 Anfavea; 2012 e 2013: Projeções Usiminas Planejamento Comercial, março 2012 8

Domestic Market Benefit from the Brazilian positive outlook Investments in industry in 2012: R$17.1 billion Investments in infrastructure in 2012: R$105.3 billion Investments in housing during the period of 2011/2014 : R$279 billion MEDIUM AND LONG TERM PROJECTS 2012 ~ R$ 230 millions 2012 ~ R$ 761 millions 2012 ~ R$ 25,6 Bi 2012 ~ R$ 11.1 Bi 2012-2016 ~ US$ 237 Bi 4.5 million tons of steel 2.7 long 1.8 flat 1.5 million tons of steel 0.9 long 0.6 flat Source: Valor Economico, PAC s website, Petrobras s website,portal da Copa Governo Federal 9

10 Agenda Clique para Market editar o texto Overview mestre Usiminas and its Business Units Financial Highlights

11 Time Line 2012 1956 Foundation of Usiminas 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 Soluções Usiminas, con-solidation of the companies Rio Negro, Dufer, Fasal and Zamprogna and industrial units Usial and Usicort Single CNPJ: Cosipa is incorporated by Usiminas 2010 Creation of Mineração Usiminas Port Agreement Mineração Usiminas and MMX 2011 Selling of Ternium shares Joint Mining and Cooperation Agreement with MMX, MBL and Ferrous Negociation with J. Mendes concluded Acquisition of Litigation Area Entrance of Ternium/ Tenaris in Usiminas Control Group New shareholders agreement singned among Niippon Group, Ternium / Tenaris and Usiminas Pension Fund until 2031

12 Strategically Located Mining Steel Steel processing Capital Goods

13 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, Cold and Hot Rolled and Galvanized (EG and HDG) Heavy Plates Heavy Plates and Hot Rolled Heavy Plates

Shareholder Composition Total Capital 1,013,786,190 Voting Capital ON 49.84% 50.16% Free Float 36.14% Nippon Group 29.45% ON ON 505,260,684 PN PN 508,525,506 Usiminas Pension Fund 6.75% Ternium / Tenaris 27.66% Control Group: 63.86% of Voting Capital 10 Board of Directors Members: - Controling Shareholders: Ternium / Tenaris (3), Nippon Group (3), Usiminas Pension Fund (1) and Employees Representative (1) - Minority Shareholders : Previ (1) and Geração Futuro Funds (1) 14

UPSTREAM DOWNSTREAM Complete solution of products and services through the value chain 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 15

16 Investments Total amount for 2012 R$ 2.0 billion Strategic focus on enhancing competitiveness of current operations In operation Galvanizing Line 550,000 tons (Unigal) Foundry 24,000 tons (Usiminas Mecânica) Hot Run Hot Strip Mill 2.3 million tons (Usiminas Cubatão) Ongoing Projects 2Q11 4Q11 1Q12 Revamping of Coke Plant II (Ipatinga) Pickling line III (Cubatão) Mining Production Reach total capacity of 12 million tons in 2013. Energy self sufficiency Reach total capacity of around 500MW

17 Results Accounted by Business Unit Income Statement per Business Units - Non Audited (R$ million) (quarter) R$ million Mining Steel Steel Processing Capital Goods Adjustment Consolidated 2Q12 1Q12 2Q12 1Q12 2Q12 1Q12 2Q12 1Q12 2Q12 1Q12 2Q12 1Q12 Net Revenue 213 239 3,097 2,573 533 497 205 251 (821) (674) 3,225 2,886 Domestic Market 143 217 2,348 2,234 522 491 203 251 (811) (654) 2,405 2,539 Export Market 70 22 749 339 11 6 2 0 (10) (20) 820 347 COGS (73) (100) (3,057) (2,574) (495) (447) (225) (258) 783 666 (3,067) (2,713) Gross Profit 140 139 39 0 37 49 (19) (7) (39) (8) 158 173 Operating Income (Expenses) (49) (36) (43) (100) (50) (51) (17) (23) 0 1 (159) (209) EBIT 91 103 (4) (100) (13) (2) (36) (30) (39) (7) (1) (36) EBITDA 100 111 201 100 0 11 (29) (25) (40) (7) 232 190 EBITDA M argin 47% 46% 6% 4% 0% 2% -14% -10% - - 7% 7% Note: All transactions among the business units are made at market price. MRS results are accounted through equity on Equity Income.

18 Results Accounted by Business Unit Income Statement per Business Units - Non Audited (R$ million) (semester) R$ million Mining Steel Steel Processing Capital Goods Adjustment Consolidated 1H12 1H11 1H12 1H11 1H12 1H11 1H12 1H11 1H12 1H11 1H12 1H11 Net Revenue 452 479 5,670 5,485 1,029 1,102 456 681 1,497 (1,658) 6,111 6,089 Domestic Market 361 390 4,582 4,701 1,012 1,079 454 651 (1,465) (1,657) 4,944 5,194 Export M arket 91 89 1,088 784 17 23 2 0 (30) 0 1,168 896 COGS (173) (123) (5,631) (5,312) (943) (993) (483) (604) 1,450 1,662 (5,780) (5,370) Gross Profit 279 357 39 173 87 109 (27) 77 (46) 3 332 719 Operating Income (Expenses) (85) (52) (143) (131) (101) (105) (40) (51) 1 3 (368) (336) EBIT 195 305 (104) 42 (15) 4 (66) 26 (47) 6 (37) 383 EBITDA 211 319 301 306 11 35 (54) (39) (47) 3 422 702 EBITDA M argin 47% 67% 5% 6% 1% 3% -12% 6% - - 7% 12% Note: All transactions among the business units are made at market price. MRS results are accounted through equity on Equity Income.

19 Steel Ipatinga Cubatão

Flat Steel Production Usiminas has a full range of flat steel products 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 Optmized Rolling Capacity - 1,900,000tons 2,000,000tons 1,950,000tons 350,000tons 1,020,000tons * HCR mill # 2 under ramp up. 20

21 Domestic Market Usiminas is focused on the domestic market with a product range to supply different sectors Sales thousand tons 1,888 1,583 240 1,406 1,512 1,340 266 243 204 561 18% 14% Segments Breakdown of Sales 2Q12 4% Auto Parts Auto industries Rolled Machinery 1,343 1,162 1,136 1,246 1,327 9% 7% 6% 8% 7% Small Diameter Tubes Civil Construction/Shapes Household Appliances Distribuitors 2Q11 3Q11 4Q11 1Q12 2Q12 Mercado Interno Mercado Externo 26% Industrial Equipment Other

22 Ebitda (millions) / ton R$ /ton 664 709 513 581 771 294 367 221 277 78 66 107 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q12 2Q12 US$/ton 420 101 119 227 291 236 299 111 158 47 37 52 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q12 2Q12 US$ /R$ 1.6737 1.7683 2.0455

23 COGS (R$ millions) / ton 1,821 1,763 1,690 1,660 1,702 1,619 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

24 Mining and Logistics Belo Horizonte Itabira ITAÚNA IPATINGA Vitória TUBARÃO Port São Paulo ITAGUAÍ Port CUBATÃO Port

Logistics Mineração Usiminas 40 Km 60 Km MODAL TCS / TSA IPATINGA Mill EFVM Trammel CUBATÃO Plant / Port Sepetiba Port Itaguaí Port (Ingá) Tubarão Port Exports Exports Exports Existing Routes New Routes 25

26 Mining and Logistics Current status 4 mining sites, acquired from J. Mendes Group in Feb/2008 Reserves of 2.6 billion tons Located in Serra Azul-MG, one of the richest iron ore sites in Brazil Production MM ton: 3.8 5.5 6.8 6.3 3.4 2008 2009 2010 2011 1H12 2Q12: production of 1.5 million tons MRS: 20% of voting shares and part of the Control Group Land in Itaguaí-RJ, acquired in 2008

Mining and Logistics Strategic partnership Acquisition by Sumitomo Corporation of 30% of Mineração Usiminas S.A., through the subscription of new shares, up to the total amount of US$ 1.9 billion. 70.0% 30.0% US$ 6.4 billion Mineração Usiminas S.A Estimated Market Value 27

28 Expansion Plan Mining 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 29 7 8 12 10 2 6 5 6 6 4 4 2 2 2 2 2 2010 2011 2012 2013 23

29 Agreements Mining MMX Port and Joint Mining Agreements MBL Joint Mining Agreement New mine acquired from Mineração Ouro Negro (former litigation area) Conclusion of the negotiation with J. Mendes Right of way agreement with Ferrous

Mineração Usiminas Serra Azul Igarapé São Joaquim De Bicas Minerita MUSA Central MUSA East MMX MUSA Pau de Vinho MUSA West Arcelor Mittal Ferrous (Santanense) Comisa Emicon Ferrous MBL Itatiaiuçu Mineração Usiminas mining operation is highlighted in yellow. 30

Itaguaí Port 31

32 Soluções Usiminas Steel Processing Camaçari Recife Campo Limpo Paulista Santa Luzia Betim Taubaté Guarulhos São Paulo Serra Cachoeirinha Porto Alegre

33 Soluções Usiminas Steel Processing 11 industrial units in MG, SP, RS, ES and PE. Processing capacity of 2 million tons/year. 2Q12 Net Revenues of R$443 million Leadership: Is the leader in the steel distribution sector since 2010, according to INDA.

34 Steel Processing Automotiva Usiminas Pouso Alegre Unit Clients 500 km 1.000 km 1.500 km

35 Automotiva Usiminas Steel Processing Pouso Alegre MG Close to major auto makers. Full service company. 2Q12 Net Revenues of R$73 million Major Clients: Ford, Mercedes Benz, Fiat, Volkswagen, Volvo, General Motors, International Trucks, Honda Toyota, PSA Peugeot Citroën, Scania.

Capital Goods 36

37 Usiminas Mecânica Capital Goods Ipatinga MG It is one of the largest capital goods company in the country. 2Q12 Net Revenues of R$205 million Market Sectors: Industrial Assembly Structures / Metal Bridges and Blanks Industrial Equipment Industrial Erection Foundry and Railcars Highlights: Supply of 30 thousand tons of blanks for wind towers of Gestamp Wind Steel.

Usiminas Mecânica Capital Goods some of its projects Ship Blocks Plant Design Ship Panel 3rd Bridge in Brasília 38

39 Agenda Clique para Market editar o texto Overview mestre Usiminas and its Business Units Financial Highlights

2Q12 Consolidated Results Highlights Crude Steel Production thousand tons Sales thousand tons (steel products) 1,858 1,845 1,583 1,512 1,888 1,672 2Q11 1Q12 2Q12 2Q11 1Q12 2Q12 Net Revenues R$ Million EBITDA R$ Million 3,225 365 3,026 190 232 2,886 2Q11 1Q12 2Q12 2Q11 1Q12 2Q12 40

41 Ebitda / Ebitda Margin (annualy) 40% 34% 32% 37% 35% 46% 42% 5,624 5,525 35% 4,368 36% 5,003 38% 6,008 20% 3,072 2,650 2,429 14% 954 1,344 1,547 1,485 11% 1,264 7% 422 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 Ebitda (R$) Ebitda Margin

Ebitda / Ebitda Margin (quarterly) 500 14% 450 11% 12% 12% 12% 400 350 300 250 200 337 365 343 8% 218 7% 7% 190 232 10% 8% 6% 4% 150 2% 100 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 0% EBITDA Ebitda Margin *IFRS 42

43 Capex (R$ million) 2,500 2,000-48% 2,100 1,100 129% 800 350 50 100 2011 2012 Steel Mine Others

44 Debt Profile (R$ million) 4,844 Duration: R$: 40 months US$: 44 months 2,343 1,912 1,550 1,391 1,458 1,325 1,048 2,501 628 486 723 683 515 1,023 35 227 864 922 905 267 157 735 2 2 288 416 302 33 155 Cash 2012 2013 2014 2015 2016 2017 2018 2019 2020 on Local Currency Foreign Currency

45 Leverage Consolidated Basis 0.8 1.0 4.3 3.8 1.3 3.1 1.9 1.7 1.5 1.6 1.4 4.9 4.1 3.3 3.6 2.9 1.0 2.3 1.6 2.8 2.5 3.4 3.1 3.6 3.9 3.9 4.2 4.2 1Q09 2Q09 3Q08 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Net Debt (R$ bi) Net Debt/EBITDA (x)

46 Working Capital - Consolidated (R$ billion) 5.31 5.16 4.97 4.73-20% = -R$938 Mi -9,7% 4.27-11,2% 3.79 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

SG&A - Consolidated (R$ million) 242 115 189 79 210 97 128 111 113 Quarter Average 2011 1Q12 2Q12 General and Administrative Selling Total SG&A

48 Balance Sheet Structure Capital Employed Funded By Net Fixed Assets Net Debt 82% 20% 18% 80% Net Working Capital Shareholders Equity Total: R$ 21,191 Million

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: 55-31-3499.8056 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.