272_usim_4q04_webcast_ingl

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WebcastFourth Quarter 2004 Results

Presentation:

Paulo Penido Pinto MarquesCFO and Investor Relations Director


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Disclaimer

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 Managements expectations in relation to future

performance. These expectations are highly dependent on market

behavior, Brazils economic situation, the industry and

international markets, and are therefore subject to change.

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The Steel Industry - Brazil

Brazilian crude steel production totaled 8.3 million tonnes

in 4Q04 and 32.9 million in 2004, a growth of 5.7%.

Domestic flat steel demand grew 13.7% and reached 10.5million tonnes in the year.

Reaction was driven initially by exporting companies and,

from 2H04 onwards, by recovery in investment-stimulated

and domestic consumer segments.

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The Global Steel Industry

World crude steel production: 9% growth in relation to

2003.

Prices: historic highs during the year.

Economic growth in main countries, highlighting North

American and Chinese markets (high steel demand)

Price increases in raw materials used in steel making.

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Consolidated Results QoQ

5

R$ million 4Q 2004 4Q 2003 3Q 2004Chg.%

4Q/4Q

Total Sales Volume (000 t) 2,170 2,120 2,011 2

Net Revenues 3,809 2,442 3,285 56Net Income 1,127 359 1,005 214

EBITDA (a) 1,816 763 1,602 138

EBITDA Margin 47.7% 31.3% 48.8%

Net Debt 3,495 6,744 4,975 -48

Net Debt / EBITDA 0.6x 2.2x 1.1x

(a) Earnings before interest, depreciation, amortization and participations.

Highlights


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Consolidated Results YoY

6

R$ million 2004 2003 Chg.%

Total Sales Volume (000 t) 8,062 7,710 5

Net Revenues 12,230 8,660 41

Net Income 3,019 1,306 131

EBITDA (a) 5,624 3,072 83

EBITDA Margin 46.0% 35.5%

Net Debt 3,495 6,744 -48Net Debt / EBITDA 0.6x 2.2x

(a) Earnings before interest, tax, depreciation, amortization and participations.

Highlights


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The System sold 2.2 milliontonnes in 4Q04 and 8.1million tonnes in 2004, 5%more than in 2003.

Domestic sales totaled 5.8

million tonnes in 2004, 8%more than in 2003.

Even with the entry of newplayers, the System ended2004 with a 55% marketshare.

Consolidated exportstotaled 2.3 million tonnes in2004, falling slightly by 4%.

Usiminas - Sales

7

69%78% 67% 67% 75% 65% 64% 73%

72%

72% 71%

Consolidated Sales (000 t.)

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

Domestic Market Export Market

25%

75%

1,830

1,939

74%

26%

1,822

65%

35%

2,119

64%

36%

73%

28%

1,910

72%

72%

27%

1,9712,011

29%

71%

2,170

71%

29%


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Usiminas Sales Mix by Product

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Sales Volume 2004

Hot Rolled

26%

Galvanized

8%

Slab

15%

Processed

Products

5%

Cold Rolled25%

Heavy Plate

21%

Sales Volume 2003

Hot Rolled

27%

Galvanized

8%

Slab

15%

Processed

Products5%

Cold Rolled

25%

Heavy Plate

20%

The breakdown of sales by product remained stable, but with increasedvolume.

Share of heavy plate increased to 21% in the product mix in 2004, as aconsequence of strong demand and higher average prices than other steelproducts offered.


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Usiminas EBITDA

9

88

9

76

0

66

0

76

3

92

1

1.

285

1.

602

1.

816

42%

33%31%

39%

46%

36%

49% 48%

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

EBITDA (R$ million) EBITDA Margin

EBITDA reached R$ 1.8billion in 4Q04, increasing138%.

For the year 2004, EBITDArose 83% and passed the R$

5.6 billion mark.


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Usiminas Consolidated Net Debt

8,

1

7,

4

7,

4

6,

7

6,

3

6,

1

5,

0

3,

5

2,7

2,2 2,2

2,0

1,7

2,2

1,1

0,6

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

CND (R$ billion) CND/EBITDA

In 2004, solid cashgeneration enabled theSystem to reduce debt byUS$ 621 million.

The Usiminas System

ended the year with US$ 717million in cash.

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Usiminas Total Consolidated Debt

4Q04: R$ 5.4 billion

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By Term

Long Term

74%

Short Term

26%

By Index

Swap CDI

33%

TJLP

11%

US$

38%

IGP-M

6%Outros

12%

Foreign currency

71%

Local currency

29%

The debt profile was extended. The percentage of long-term commitmentsincreased from 63% in Dec 2003 to 74% in Dec 2004.


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Usiminas 4Q04 Consolidated Cash Flow(Brazilian Corporate Law) R$ million

12

1,90219911

160288109

6191481,816

1,324

InitialB

alance

EBITD

A

NewFinancing

Amortization

andFina

ncing

Interest

Workin

gCapitalVariation

Investments

Dividend/

InterestonC

apital

Others

FinalBalan

ce


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Stock Performance in 2004

Valuation of Usiminas PNA(USIM5): 65.3% vs.17.8%Ibovespa index.

Dividends and interest oncapital totaled R$ 1.1 billion,i.e., a 35% dividend pay-outratio and a 9.5% dividendyield.

Usiminas has the thirdlargest weight on the

Ibovespa (4.78% of theIndex).

Company is preparing tolist on Latibex.

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USIMINAS PNA X IBOVESPA IN 2004

12/30/20

03

1/30/200

4

2/29

/200

4

3/30/200

4

4/30/200

4

5/30/200

4

6/30/200

4

7/30/200

4

8/30/200

4

9/30/200

4

10/30/20

04

11/30/20

04

12/30/20

04

USIM5 +65%

IBOVESPA +18%

R$ 32.63

R$ 53.95

26,196

22,236


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Investments (R$ million)

600

910

579

333

475

2002 2003 2004 2005 2006

74%

72% New investment phasestarted in 2005-2006

Usiminas:

New coke oven plant,which will make companyself-sufficient in coke.

60MW thermoelectricpower plant to increase selfgeneration in Ipatinga

Cosipa:

Top blowing blast furnace

turbine in to increase selfgeneration in Cubato

Revamping of continuouscasting machine

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Outlook

Brazilian economy tends to grow approx. 3.5% in 2005.

Brazilian flat steel market should grow by 9% in 2005,according to the IBS.

No substantial international price reductions are foreseenin the medium term in function of heated demand and

raw materials increases.

Consequence of this scenario: solid cash generation seen

in last quarters should continue.

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Goals of the Usiminas System in 2005

Maintenance of product sales at 8 million tonne level.

Domestic market continues a priority = 75% of sales,

investing in stability of commercial relations and

maintenance of business profitability.

Market share maintenance, with position of leadership in

flat rolled steel market.

Priority of funds generation given to investment program,maintenance of dividend policy and continuity of debt

repayment.

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For Additional Information:

Usiminas Investor Relations

Luciana Valadares dos [email protected]

Tel: (+55 31) 3499-8619

Douglas Lee [email protected]

Tel: (+55 31) 3499-8856

Matheus Perdigo Rosa

[email protected]

Tel: (+55 31) 3499-8056

COSIPA - Gilson Rodrigues Bentes

[email protected]

Tel: (+55 11) 5070-8980

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Bruno Seno Fusaro

[email protected]

Tel: (+55 31) 3499-8710

www.usiminas.com.br

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