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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
Debentures - 500 4 / 5
Prepayment 600 - 5 / 7
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
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
Debentures - 500 4 / 5
Prepayment 600 - 5 / 7
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
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