Webcast 3q08 Eng Final

7/31/2019 Webcast 3q08 Eng Final

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October 31, 2008

Conference Call / Webcast | Third Quarter 2008 Earnings

Paulo Penido Pint o MarquesCFO and I nvest or Relat ions Director


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Declarat ions relat ive to business perspect ives of t he Company,

operat ing and f inancial result s and proj ect ions, and references t o the

growth of t he Company, const i t ut e mere forecast s and were based onManagement s expectat ions in relat ion to future performance. These

expectat ions are highly dependent on market behavior, Brazi l s

economic situation, the industry and international markets, and are

t herefore subj ect t o change.

Disclaimer


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Macro Economic Analysis - BrazilMacro Economic Analysis - Brazil

Brazil ian economy w ent t hrough a st rong period of grow t h unt il Sep/ 08.

The count ry should end 2008 w it h st rong economic figures.

Estimates

GDP Growth = 5.3%

Industrial Production Growth = 5.5%

Inflation: 4.5% (BACEN target)

St eel I ndust ry:

Flat Steel demand increased 10% until September/08 when compared to the sameperiod of 2007, growth observed in almost all sectors.


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Macro Economic Analysis - WorldMacro Economic Analysis - World

St eel I ndust ry:

Uncertainty regarding the continued growth of demand. Reduction of inventory levels. Decrease in international prices.

The subpr ime mor t gage crisis in t he US direct ly in fluenced the financial

bubble. Great er impact s w ere felt t hroughout t he w orld, affect ing mainly t he

US and European economies.

An inflationary pressure w as seen due t o an increase in t he comm odit y

prices.


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OutlookOutlookDomestic DemandDomestic Demand

For 2009, the forecast is a more modest expansion pace in domest ic

demand for f lat st eel, which can be supplied w it hout import s and of t he

overburden of t he product ion unit s.

Usim inas can makenecessary operat ional adjustmentsin order t o maintaint he balance betw eensupply and demand

10.

109

9.

229

9.

902

11.

669

12.

820

12.

475

2004 2005 2006 2007 2008 2009

+6,9%

+2,8%Demand Grow t h (thous. tons)


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UsiminasUsiminasDevelopment PlanDevelopment Plan

I nvest ment Plan is w ell st ructured. Capex fit s int o t he capital structure considered adequat e by t he

Company.

50% of t he invest ment plans capex w il l be financed w ith cashgenerat ion and the remainder t hrough debt.

Transactions

Value

US$ million

Value

R$ million

Term

Year s

BNDES - Credit Line - 900 6

BNDES - 493 7

Eurobonds 400 - 10

Debentures - 500 4 / 5

Prepayment 600 - 5 / 7

JBIC 550 - 10

TransactionsValue

US$ million

Value

R$ million

Term

YearsBNDES - Cr edit Line - 900 6

BNDES - 493 7

Eurobonds 400 - 10



JBIC 550 - 10

Loans and Financ ing already signed

TransactionsValue

US$ million

Value

R$ million

Term

Year s

BNDES - Credit Line - 900 6

BNDES - 493 7

Eurobonds 400 - 10



JBIC 550 - 10

TransactionsValue

US$ million

Value

R$ million

Term

YearsBNDES - Cr edit Line - 900 6

BNDES - 493 7

Eurobonds 400 - 10



JBIC 550 - 10

Loans and Financ ing already signed


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STEELMAKING MINING TOTAL

2008 1.480 960 2.440

2009 2.550 1.060 3.610

2010 4.410 480 4.890

2011 1.830 770 2.600

2012 360 200 560

TOTAL 10.630 3.470 14.100

UsiminasUsiminasDevelopment PlanDevelopment Plan

The capex plan can be adjusted in order t o preserve the qualit y oft he Companys f inancial perform ance.

US$ million

At t he invest ment peak,t he Total Debt / EBI TDArat io reaches t he

maxim um of 2,5x

I nvest ment Grademaintenance


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Usiminas3Q08 and 9M08 Results3Q08 and 9M08 Results

Net revenue w as record in 3Q08 - R$ 4.5 billi on, due t o bett er pri ces and mi x. EBI TDA record in t he quart er - R$ 1.9 bil l ion Highlights w as the EBI TDA margin in 3Q08 = 42.6% .

Net Profit of R$ 2.4 bil l ion in the 9M08, 8% higher t han 9M07. Higher result of equity income.

Conservativ e financial management . Usiminas does not speculat e thought fi nancial derivatives.

I mpact in t he quarter of R$ 498 mill ion due t o foreign exchange costs (devaluation of t he Brazilian real against

t he US dollar = account ing im pact , non-cash effect ).

R$ million 3Q 2008 3Q 2007 2Q 2008Chg.

3Q08/3Q079M 2008 9M 2007

Chg.9M08/9M07

Total Sales Volume (000 t) 1,915 2,094 1,917 -9% 5,718 6,010 -5%

Net Revenues 4,451 3,630 3,973 23% 11,978 10,346 16%Gross Profit 1,836 1,343 1,455 37% 4,524 3,690 23%

Operating Result (EBIT) (a) 1,489 1,139 1,245 31% 3,745 3,118 20%

Financial Result (537) 13 201 (366) 83 0%

Net Income 880 758 861 16% 2,387 2,202 8%

EBITDA (b) 1,894 1,375 1,458 38% 4,607 3,786 22%

EBITDA MARGIM 42.6% 37.9% 36.7% + 4.7 p.p. 38.5% 36.6% + 1.9 p. p.

EBITDA (R$/t) 989 657 761 51% 806 630 28%

Total Assets 25,388 19,893 24,415 28% 25,388 19,893 28%

Net Debt 1,579 (243) 552 1,579 (243) 0%

Stockholders' Equity 14,334 12,115 13,598 18% 14,334 12,115 18%

(a) Earning s before interest, tax and participations .

(b) Earning s before interest, taxes, depr eciati on, amo rtization and participations.

Highlights


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Manuteno da l iderana de mercado - Market Share de 49% no 3T08.UsiminasConsolidatedConsolidatedSalesSales

Market Share: 49%

Product ion volum e and sales in line w it h t he Companys planning.

3Q08 Total Sales:

Down 9% in relat ion to 3Q07

and stable in r elat ion t o

2Q08.

DM = sales growth of 7%

until Sep/08.

EM: down 37% in relat ion to3Q07 and increase of 19% in

relation to 2Q08

Consol i da t ed Sa les (00 0 t )

1 Q0 4 2Q 04 3 Q0 4 4 Q04 1 Q0 5 2Q0 5 3 Q0 5 4Q0 5 1 Q0 6 2 Q0 6 3 Q06 4Q06 1 Q07 2Q07 3Q0 7 4Q07 1 Q0 8 2Q0 8 3 Q0 8

Dom e st ic Market Expor t Marke t

73%72% 71% 71%

28%

1,910

27%

1,9712,011

29%

2,170

29%

78%

1,768

22%

70%

1,829

30%

69%

1,770

31%

54%

1,981

46%

62%

1,954

38%

69%

2,028

31%

1,971

32%

68%

1,992

33%

67%

1,936

28%

72%

1,980

24%

76%

2,095

23%

77%

1,980

19%

81%

1,886

19%

81%

1,917

13%

87%

16%

84%

1,915

Consol i da t ed Sa les (00 0 t )

1 Q0 4 2Q 04 3 Q0 4 4 Q04 1 Q0 5 2Q0 5 3 Q0 5 4Q0 5 1 Q0 6 2 Q0 6 3 Q06 4Q06 1 Q07 2Q07 3Q0 7 4Q07 1 Q0 8 2Q0 8 3 Q0 8

Dom e st ic Market Expor t Marke t

73%72% 71% 71%

28%

1,910

27%

1,9712,011

29%

2,170

29%

78%

1,768

22%

70%

1,829

30%

69%

1,770

31%

54%

1,981

46%

62%

1,954

38%

69%

2,028

31%

1,971

32%

68%

1,992

33%

67%

1,936

28%

72%

1,980

24%

76%

2,095

23%

77%

1,980

19%

81%

1,886

19%

81%

1,917

13%

87%

16%

84%

1,915


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Spain

13%

Sout h Korea

4%

USA

13%

Thailand

5%

Vietnan

3%

Mexico

13%

Argentina

18%

Chile

8%

Germany

7%

Taiwan

7%

Outros

9%

UsiminasUsiminasDomestic Market Sales and ExportsDomestic Market Sales and Exports

Domestic Market Sales3Q08

Exports9M08

Hot Rolled

31%

Processed

Products

3%

HDG

6%

Electrogalv.

3%

Cold Rolled

24%

Heavy Plates

24%

Slabs

9%


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UsiminasUsiminas

Financial HighlightsFinancial Highlights

Record EBI TDA consolidates t he basis for t he Companys grow t h

Record EBI TDA t otaled R$ 1 .9 bil lion

(US$ 1.1 bill ion) in 3Q08, that is, 38%

higher t han 3Q07 and 30% highert han 2Q08.

Total of R$ R$ 4.6 bill ion in t he 9M08.

Highlight for t he EBI TDA margin of 43%

in 3Q08.

4

04

4

14

4

79

5

65

5

51

5

59

6

22

7

17

6

83

7

21

8

81

1

,137

31%

34%

39%36% 35%

31%

37%38%

35% 35%37%

43%

4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08

EBITDA (US$ mill ion) EBITDA Margin

EBI TDA & EBI TDA Margin


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UsiminasUsiminasFinancial HighlightsFinancial Highlights

Usim inas finds it self in a favorable posit ion t o implement it s developmentplan.

Net Debt :

US$ 0.8 bi l l ion in 9/ 30/ 08

Adequate debt profil e

Debt prof ile by Cur rency:

Local: 32%

Foreign : 68%

0.

8

0.

9

0.

7

0.

7

0.

8

0.

4

0.

1

-0.

1

-0.

1

-0.

2

0.

4

0.

3

0. 3 0.4 0.4 0.20 0 -0.1 -0.2

0.1 0.1 0.20.4

4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08

CND (US$ bi) CND/ EBITDA

Consolidat ed Net Debt / EBI TDA


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UsiminasUsiminas3Q08 Consolidated Cash Flow -3Q08 Consolidated Cash Flow -R$ millionR$ million

Solid and consistent cash generat ion.

4,098(6)529

765

70383306731,894

4,523

InicialBalanc

e

EBITD

A

NewFinancin

g

Amortization

ofFinancin

g

Interest

Workin

gCapitalChang

e

Investment

s

Div

idends/InterestonC

apital

Others

FinalBalanc

e


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ADRADR

Nvel INvel I

UsiminasUsiminasStock PerformanceStock Performance

Despit e t he solid f undament als,Usiminas shares depreciated

around 30% unt i l

Sept ember/ 08, due t o the

int ernational crisis and to the

plumm eting st ock marketprices.

69.3

77.5

74.6

50

60

70

80

90

10 0

11 0

12 0

13 0

14 0

15 0

16 0

17 0

18 0

Dec -07 Jan-08 Feb-08 Mar -08 A pr - 08 May -08 J un- 08 Jul- 08 A ug-08 Sep- 08

IBOVESPA USIM5 USIM3

69.3

77.5

74.6

50

60

70

80

90

10 0

11 0

12 0

13 0

14 0

15 0

16 0

17 0

18 0

Dec -07 Jan-08 Feb-08 Mar -08 A pr - 08 May -08 J un- 08 Jul- 08 A ug-08 Sep- 08

IBOVESPA USIM5 USIM3


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New execut ive st ructure announced by the Board of Direct ors assuresbet ter capabil it y t o face market t rends.

Wit hin Usim inass comm ercial st rat egy, t he remaining 49%part icipat ion in DUFER S/ A w as acqui red, reinforcing t he groupspresence in t he dist ribut ion and services cent er segment s.

UsiminasUsiminasOther Highlights of the QuarterOther Highlights of the Quarter

Usim inas Mecnica and Nuclebrs Equipament os Pesados Nuclepest ablished a part nership t o supply capit al goods. The forecast ofproject s is in t he amount of R$ 300 mill ion.

Usim inas is included, for t he second consecut ive year, in t he DowJones Sustainabilit y World I ndex t he only steel company in t heAmericas t o be part of t his index.


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h t t p : / / e n g . u s i m i n a s .c o m .b r

Investor Relations:

Bruno Seno Fusaro (Head of IR) Gilson Rodrigues Bentes Matheus Perdigo [email protected] [email protected] [email protected].: +55-31-3499-8772 Tel.: +55-31-3499-8617 Tel.: +55-31-3499-8056Fax: +55-31-3499-9357 +55-11-5070-8980

Luciana Valadares dos Santos Diogo Dias Gonalves [email protected] [email protected] Tel.: +55-31-3499-8619 Tel.: +55-31-3499-8710

Declarations contained in this presentation in relation to the business outlook of theCompany, operational and financial projections and references to the growth potential of theCompany constitute mere forecasts and were based on the expectations of the Managementin relation to future performance.

These expectations are highly dependent on market behavior, of the economic situation inBrazil, on industry and international markets, and are, therefore, subject to changes.

ADR

Nvel I

Documents

Webcast 3q08 Eng Final