3Q08 R l3Q08 Results Conference Call

Transaction with LWB Refractories

On November 5, 2008, the shareholders approved the operation.

LWB is a leader in the market of basic refractories and high added-value dolomite products.

Magnesita begins to operate directly in the North-American, European d A i kand Asian markets.

Thi i ill b i i d ill k i i fThis operation will bring synergy gains and will make it easier for Magnesita to replicate its business model to other customers in the steelmaking industry worldwide.

2

Market – Steel Industry

Raw Steel Productioni B il 103 t

The steel industry

R St l P d ti i

9,380

in Brazil - 103 tonsremained heated in 3Q08...

26 827

Raw Steel Production in Brazil – 103 tons

8,6778,806

25,004

26,827

6.5%

7.3%3Q07 2Q08 3Q08

8.1%

... surpassing the production of the previous

9M07 9M08

3

production of the previous periods.

Source: IBS – Brazilian Steel Institute

Market – Cement Producers

Public works and the real estate segment contribute to the growth of

Brazilian Cement Production – tonscontribute to the growth of

the cement market....

29,042,179

Production tonsJan-Jul

28,841,149

Cement Consumption (tons)Jan-Jul

25,572,907

24,734,380

13.6%

16.6% 2007 2008

... demand and production continue to2007 2008

4

production continue to grow.

Source: SNIC – Brazilian Cement Industry Union

Quartely Net Income – R$ million

The improvement in product mixThe improvement in product mix and the higher exchange rate

produced growth of net income by 19.9% (QoQ) and 13.7% (YoY).

125.1112.5

59.3Recovery in the gross margin and in

the EBITDA margin reflected persistent control of costs and expenses.

28.5

46.6

18 729.630.030.2

18.7

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 1Q08 2Q08 3Q083Q08 results dot reflect the recent

price adjustment negotiations which will be entirely reflected in 4Q08.Pro-forma

Not considering -23.6

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 1Q08 2Q08 3Q08

goodwill amortization

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Sales Breakdown

Sales Volume Breakdown9M07

Sales Volume Breakdown9M07

Sales Volume Breakdown9M08

Sales Volume Breakdown9M089M079M07 9M089M08

Other Minerals

26%

Other Minerals(*)

26%

132 kt

297 kt

24%

313 kt

122 kt

Refractory60%Sinter

14%

297 kt

68 ktSinter14%

Refractory62%

313 kt

67 kt

497 kt 502 kt

14% 14% 62%

(*) not including the non-recurring sale of 210,000 metric tons of magnesium silicate in 2Q08

497 kt 502 kt

Sinter

9M08x9M07 = - 1.0%

Total

9M08x9M07 = + 0.9%

Refractory

9M08x9M07 = + 5.2%6

Net Revenues

Net Revenues– R$ millionNet Revenues– R$ million Net Revenues by Product- %Net Revenues by Product- %yy

312

374323 316 4 0%5.0% 5.0%

13.0% 12.0% ServicesOther Minerals

Local Revenues3Q07 -> 3Q08

Exports

312 323306 316 4.0% 4.0%5.0%Sinter

58 59 62 4285

3Q07 -> 3Q08+R$36MM (14,1%)

Domestic

78.0% 79.0% Refractory254 247 261 274 289

$

9M07 9M083Q07 4Q07 1Q08 2Q08 3Q08

Obs.: excludes non-recurring income from sale of 210 kt of magnesium silicate amounting to R$2.5 MM in 2Q08

R$ 892 MM R$ 1,012 MM

Growth of Brazilian steel industry leads to increasing revenues

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Revenues Breakdown

Refractory Revenues Breakdown – 9M08Refractory Revenues Breakdown – 9M08 Refractory Revenues Breakdownfor the Steel Industry 9M08

Refractory Revenues Breakdownfor the Steel Industry 9M08yy for the Steel Industry – 9M08for the Steel Industry – 9M08

Cement R$ 124 MM

Volume36.5%

Steel R$ 605 MM

76.3%

15.6%

Cast Steel63 5%Others

R$ 65 MM8.1%

63.5%

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EBITDA / EBITDA Margin

EBITDA – R$ millionEBITDA – R$ million EBITDA Margin – %EBITDA Margin – %gg

297 8

187.8

297.8

109.3

29.1%21.7%

29.2%29.8%

94.8

55.6

67.79.4%2Q

3Q

64.5 93.7

2007 2008

3Q07 4Q07 1Q08 2Q08 3Q081Q

2007 2008

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Costs

COGS - 9M08COGS - 9M08 Operating ExpensesOperating Expensesp g pp g p

92Other

Accounts

5664

51 52

Raw Materials34%

Industrial Maintenance

Eletric Energy4%

13%

62

Administratives & OthersDepreciation

6%

Maintenance4% 33

31 26 25

SalesFuel13%

Labor26%

31 30 25 25 27

3Q07 4Q07 1Q08 2T08 3T08

2008 Administrative Expenses increased because of non

3Q07 4Q07 1Q08 2T08 3T08

2008 Administrative Expenses increased because of non recurring costs due to the process of merger and

restructuring of the Group’s companies. Year to date, these costs already total R$ 16.9 million.10

Debt

Net Debt/EBITDANet Debt/EBITDA

The Company’s debt, with over 85% on the long term, minus cash balance of R$ 728

384 397

246long term, minus cash balance of R$ 728

million, corresponds to 1,0 x the annualized EBITDA

10730/9/2007 30/9/2008

-107Dívida Líquida Ebitda

NOTE: 09.30.08 – annualized EBITDA was considered

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Indicators - Magnesita and LWB

Ebitda Margin Ebitda Margin reaches 23,7% 23,7% Net Debt x Ebitda (*)Net Debt x Ebitda (*)

Magnesita = 1.0

1 872

considering the results of the 2 Companies until Sep/08.

g .LWB = 6.6

Magnesita + LWB = 2.8

LWB 858

1,872

1,168

1,670

Magnesita1,014

597

571 287

146 194

1,286 704

444591

g 597 417 298 397 384

Net Revenues Costs Gross Profit Ebitda (9M08) AnnualizedEbitda

Net Debt

Obs.: LWB data were converted into real from euro quotation of 09/30/2008 (R$2.6031), without BRGAAP adjustments

Ebitda

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LWB Sales

Refractory Sales Volume Breakdown9M08

Refractory Sales Volume Breakdown9M08

Refractory Revenues Breakdown9M08

Refractory Revenues Breakdown9M089M089M08 9M089M08

Tempered Dolomite

25%

Others12% Others

19%

Tempered Dolomite

17%25%Magnesia/Mag-

Carbon14%

19% 17%

Dolomite Burned Dolomite

31%

Magnesia/Mag-Carbon

20%

523 2 kt

Burned Dolomite

32%

Monolithics17%

R$ 773 2 MM

31%Dolomite

Monolithics13%

523.2 kt R$ 773.2 MM

Obs.: considering 09/30/2008 euro quotation (R$2.6031)

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Stock Performance

50 000240

Stock Performance

30,000 35,000 40,000 45,000 50,000

160180200220240

g vo

lum

e R

$

8 =

100

5 00010,000 15,000 20,000 25,000

80100120140160

vera

ge tr

adin

g

02.0

4.20

08

-5,000

6080

2/4/2008 2/5/2008 2/6/2008 2/7/2008 2/8/2008 2/9/2008

Av

Volume R$ MAGG3 Ibovespa

MAGG3 – 1.2%Ibovespa – 21.8%

Average daily trading volume R$ 9.6 million14

Perspectives

CHALLENGES OPPORTUNITIES

• Slowing down world’s economic growth;

•Environment surrounded by uncertainties;

• Decreasing raw steel production;

• New exchange rate level = major international competitiveness;

• New businesses and new markets;• Decreasing raw steel production;

• Clients’ expansion projects postponed;

• Increasing raw material costs.

• LWB synergies;

• Privileged plant locations;

• Clients portfolio diversification;

• The crisis boosts the process of implementation of changes.

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