352_apresenta
TRANSCRIPT
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3rd Quarter
2005
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1950 1960 1970 1980 1990 2000
Source: International Iron and Steel Institute - IISI - 2005
Years World Prod.
1950 200
1955 270
1960 350
1965 450
1970 595
1975 6441980 716
1985 719
1990 770
1995 752
1996 750
1997 799
1998 777
1999 788
2000 848
2001 8502002 902
2003 965
2004 1,033
Years World
1970-75 1.6
1975-80 2.2
1980-85 0.11985-90 1.4
1990-95 -0. 5
1995-00 2.4
2000-02 3.2
2002-03 6.6
2003-04 7.0
Average Growth
Rates
% per annum
100
400
200
300
500
600
700
800
900
1,000
1,100
World Steel Production
(million t.)
Substantial growth in the past few years ...
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112.7
98.5
64.3
47.5 46.4 38.732.9 32.6 28.4
269.3
Source: International Iron and Steel Institute - IISI - 2005
2004(million t.)
China Japan USA Russia Korea Germany Ukraine Brazil India Italy
Steel Production
... mainly coming from China
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-24.7
-13.2
-9.2
-6.1
-6.0
-5.0
4.2
7.2
8.4
11.0
28.2
28.2
30.5
-30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35
Turkey
Germany
Belgium / Luxembourg
BrazilRussia
Ukraine
Japan
Source: International Iron and Steel Institute - IISI - 2005
Top net ExportersTop net importers
World Steel Trade
million t.million t.
Trade ~ 200 million tons per year
Trend may continue through 2005
Vietnam
Italy
Hong Kong
Thailand
China
USA
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Gerdau
22.1%CSN
16.8%
Others
6.4%Acesita
2.5%
USIMINAS
SYSTEM27.2%
Arcelor
25.0%
17,6
17,9
19,0
20,8
21,4
30,2
31,6
32,4
42,8
46,9
8,923 - USIMINAS
10 - Thyssen Krupp
9 - Nucor
8 - Corus
7 - US Steel
6 - Baosteel
5 - Posco
4 - JFE
3 - Nippon Steel
2 - Mittal Steel
1 - Arcelor
Source: IISI - 2005
Source: IBS - 2005
million t.
Usiminas System is the 23rd largest producer in the worldand 1st flat steel producer in Latin America
Top Brazilian SteelProducers - 2004
Usiminas
Leading Producer
Major Steel Plants 2004(crude steel production)
million t.
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Steel in Brazil
High quality iron ore
Well located plants and modern technology
Competitive Costs
Product quality and environmental management
Qualified labor and management
Its competitive conditions make the country a global leader
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232
262271
285 286 289302 303
309 316321
329337
BrazilCIS
MexicoIndia
Canada
USAMini
China
Australia
KoreaIntegJapan
WestEUR
EastEUR
USAInteg
Source: WSD - August 2005
Cost Competitiveness
Production Cost (US$/t)Slabs (Jun 2005)
Brazil has the lowest production cost in the world
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Operating Margin % - 2004
Cost Competitiveness Usiminas has one of the highest operating margins in the world
Data: Integer Research, Company Annual ReportsSeptember, 2005
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RAILROAD
HIGHWAY
CVRD
SO PAULO
BAHIA
MINAS GERAIS
ATLANTIC OCEAN
Itabira
Vitria
Port ofPraia Mole
Santos
Ipatinga
Usiminas
Belo HorizonteUsiminas
Headquarters
Sepetiba Port
Rio de JaneiroSo Paulo
Cosipa
Cubato
Usiminas
Location: Ipatinga, State of
Minas Gerais
Cosipa
Cubato, State of
So Paulo
Usiminas is strategically located
Close to main markets
2 ports
Railroad (MRS)8
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Products
Complete product lines: from slabs to coated products
Major consumers
Heavy plate 1,000,000 1,000,000
Hot coil 3,550,000 2,100,000
Cold coil 2,500,000 1,200,000
--
Capacity (tonnage/year)
360,000
400,000
Slab 5,000,000 4,500,000
Electrogalvanized coil
Hot dip galvanized coil
Pipelines, pressure vessels,
shipbuilding,general structures.Agricultural machinery, pipe and tube,chassis, gas cylinders, containers,generalstructures.
Auto industry, household appliances,packaging.
Auto industry, household appliances.
Auto industry, household appliances,civil construction.
Rolling mills.
Capacity: 4.5 million t.Capacity: 5.0 million t.
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Sales(thousand t.)
Domestic market is a priority
Usiminas + Cosipa
As of September, 2005
72%
82% 70% 69% 72%
28%
18%
30% 31% 28%
2001 2002 2003 2004 9M05
Domestic Market Foreign Market
6,602
7,722 7,7108,062
5,367
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Civil
Construction
7%
Auto
Industry
13%
Autoparts
15%
Distributors
23%
Others
16%
Small Diam.
Tubes
7%
Pipelines
9%
Packaging
2%
HouseholdAppliances
2%
Shipbuilding
1%Elect.
Equipment
5%
Domestic Sales - 9M05
Usiminas + CosipaVolume: 3.88 million t.
Fasal, Rio Negro and Dufer7%
{
Combination of market leadership and diversifiedcustomer base reduces market risk
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15%
6%
31%
25%
51%
28%
77%
12%
52%
51%
32%
30%
7%
14%
75%
14%
6%
17%
42%
7%
7%
21%
55%
87%
55%
35%
66%
46%
47%
42%
41%
6%
0% 20% 40% 60% 80% 100%
Distributors
Packaging
Civil Construction
Shipbuilding
Elect. Equipment
Household Appliances
Pipelines
Small Diam. Tubes
Autoparts
Auto Industry
TOTAL
Usiminas Cosipa Others
Usiminas + Cosipa = 53%
Domestic Market Share (%)9M05
Combination of market leadership and diversifiedcustomer base reduces market risk
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Domestic Market Outlook
2,4002,210
1,8281,7931,8171,682
2000 2001 2002 2003 2004 2005E
9,20010,109
8,9088,5768,6508,368
2000 2001 2002 2003 2004 2005E
Source: Anfavea / UsiminasSource: IBS / Usiminas
Flat Steel Demand (1,000 t.) Vehicle Production (1,000 vehicles)
Sector 2003 2004 04/03 (%)
Auto 817 1,142 39.8
Autoparts 928 1,188 28.0
Shipbuilding 32 84 162.5
Agricultural/Road Mach. 213 247 16.0
Industrial Machinery 173 178 2.9
Household Appliances 287 343 19.5
Civil Construction 800 868 8.5
Small Diam. Tubes 757 743 -1.8
Distributors 2,794 3,097 10.8
Pipelines 310 344 11.0
Others 1,797 1,875 4.3
TOTAL 8,908 10,109 13.5 Source: Usiminas
-9.0%
8.6%
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Usiminas + Cosipa
Volume: 1.5 million t. - 9M 2005
International Market
United States
22%China
22%
Spain
2%
Others
8%
Germany
10%
Colombia
3%
Mexico
9%
South Korea
7%
Portugal
1%
Canada
1%
Taiwan
6%
Chile
3%
Argentina
6%
Diversified geographic sales
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Investments & Technology(US$ million)
Commitment to the best technology
More than US$ 3 billion invested in the last decade
Partnership with Nippon Steel assures access to state-of-the-art technology in steelproduction, including high value-added products
6th Technology Transfer Agreement with Nippon Steel, valid until 2009
407 registered patents, of which 23 are international
150 researchers
In the last 3 years, for each US$ 1 spentin technology Usiminas sells US$ 3
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Investments & Technology(US$ million)
Commitment to the best technology
525578
469
13694 83 65
130
255
212162
156
452
79
70
135
8032
6052
31
36
1997 1998 1999 2000 2001 2002 2003 2004 9M05 2005E 2006E
New Investments
737 740
500
292
546
111 119 117
200
390
Usiminas
Cosipa
140
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Commitment to the best technology
Investments & Technology(US$ million)
Next 2 years: Maintenance - approximately US$ 120 million per year
Projects approved by the Board Increase of self-generated energy from 16% to 33%
Power Plant 60 MW - Usiminas
BF Top blowing turbine 12 MW - Cosipa
Self-sufficiency in coke production by 2007550.000 tons/year Coke plant - Usiminas
Productivity
Revamping of Continuos Casting Machine - Cosipa
Projects under study Production Capacity Increase (on-going studies)
1.0 ~ 2.0 million tons
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Creation of Ternium
Consolidate control of Hylsamex, Sidor and Siderar
Ternium will have ~ 11.5 million t. capacity
Present Situation Proposed SituationUsiminasTechint G.
SiderarSidor Hylsamex
Ternium
Amaznia
Usiminas
SiderarSidor
16.6%
5.3%
59.7%
Control
59.7%
Control
Control
16.3%83.7%Initial
C. Amaznia
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Ebitda Evolution
Consolidated (US$ million)
AVG.
US$
Investment return and market conditions have allowedconsistent cash generation ...
539
655646652
538
422
318263
225255258
274
200170150
49%46%
39%
31%33%
36%
42%45%
37%
31%
27%
48% 50% 47%
41%
1Q02
2.3220
2Q02
2.5840
3Q02
3.3697
4Q02
3.7141
1Q03
3.4929
2Q03
2.9810
3Q03
2.9326
4Q03
2.8999
1Q04
2.8985
2Q04
3.0429
3Q04
2.9782
4Q04
2.7862
1Q05
2.6672
2Q05
2.4819
3Q05
2.3454
Ebitda Ebitda Margin
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Ebitda Evolution
Consolidated (US$ million)
AVG.
US$
Investment return and market conditions have allowedconsistent cash generation ...
1,8401,930
1,001
794671
742
530
46%46%
35%35%32%
35%31%
1999
1.8133
2000
1.8300
2001
2.3539
2002
2.9236
2003
3.0746
2004
2.9262
9M05
2.4981
Ebitda Ebitda Mar in
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1,8171,8121,8472,033
2,2042,3162,5982,6262,705
2,7642,5932,699
2,8113,111
3,387 0.7
5.2 5.04.2
3.4 2.9 2.8 2.7 2.6 2.4 1.9 1.4 1.1 0.8 0.7
500
,500
,500
,500
,500
1Q02
2.3236
2Q02
2.8444
3Q02
3.8949
4Q02
3.5333
1Q03
3.3531
2Q03
2.8720
3Q03
2.9234
4Q03
2.8892
1Q04
2.9086
2Q04
3.1075
3Q04
2.8586
4Q04
2.6544
1Q05
2.6662
2Q05
2.3504
3Q05
22,222
Total Debt Total Debt / Ebitda
R$ /US$
Total Debt Evolution
Consolidated (US$ million)
... and have made it possible to considerably reduce debt
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1235
834779
808
82
524
388
239309
Cas h 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
on
SwapCDI44%
US$
56%
Debt Maturity Consolidated(US$ million)
Long74%
US$ 1,344 mi
Short
26%US$ 473 mi
Foreign69%
Local31%
TERM CURRENCY
Note: Principal, 2005- October to December maturities
Debt has an adequate maturity profile
Stand by Facility- Export Pre-Payment US$ 250 million
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Control Group: 53%
Usiminas
Voting Capital
Shareholder Structure
Excellence of the mainshareholders
Board of Directors from solid Brazilianand foreign groups
Long-term relationships with steelbusiness and Usiminas
Committed to add excellence andexperience to business management
CVRD23.0%
Others(Distributors)
2.3%
Others8.8%
Sudameris(ABN Amro)
1,9%
Bradesco2.6%
Caixa dosEmpregados da
Usiminas
13.4%
Nippon Usiminas18.4%
Camargo Corra7.3%
Votorantim7.3%
Previ14.9%
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Potential value creation for shareholders
5750
72
107
78
46
0
20
40
60
80
100
120
Annual shareholder return(2003 - Jul 2005)
BelgoGerdau
CST
Usiminas
CSN
% p.a.
Source: Economtica, Banco Ita (Oct./05)
Creation of Value for Usiminas and thesteel industry has been considerable
over the last few years ...... and Usiminas still has strong
potential for additional value creation
Acesita
Ibovespa = 28%
EV /
EbitdaP / E
2005e 2005e
Arcelor 3.6 5.0
Posco 2.5 5.2
China Steel 3.9 5.8
International Avg. 3.3 5.4
Usiminas 2.2 3.7
CSN 3.2 7.2Gerdau 3.2 5.5
Arcelor Brasil 3.8 7.5
Brazil Avg. 3.1 6.0
Multiples
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Positive stock market reaction
(*) Theoretical Ibovespa portfolio Sept/Dec 2005
2001
2002
2003
2004# of trades 232
Shares (000) 567
Vol. (R$ 000) 3,924
Ibov. Portf. 1.25%
Position 26th
# of trades 265
Shares (000) 628
Vol. (R$ 000) 4,067
Ibov. Portf. 1.49%
Position 21st
# of trades 457
Shares (000) 800
Vol. (R$ 000) 12,745
Ibov. Portf. 2.67%
Position 11th
# of trades 1,060
Shares (000) 1,040
Vol. (R$ 000) 40,005
Ibov. Portf. 4.05%
Position 5th
Steel Sector Bovespa 2004
Ibovespa Portfolio
5.72%
4th
2005 (*)
New Ibov. Portfolio
... & ADR I e Latibex
Usiminas PNA
31%
Sid Nacional ON29%
Gerdau PN
21%
Sid Tubarao PN9%
Others10%
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Sept 30/05 Dec 31/04 Dec 31/03 Dec 31/02
Crude Steel Production (thsd t) 6,517 8,951 8,621 8,447
Sales (thsd t) 5,367 8,062 7,710 7,722
Net sales (US$ million) 4,035 4,197 2,845 2,250
EBITDA (US$ million) 1,840 1,930 1,002 794
Net Profit (US$ million) 1,167 1,032 426 (152)
Gross Debt (US$ million) 1,817 2,033 2,626 2,699
Gross Debt / EBITDA 0.7 1.1 2.5 3.9
EBITDA / Interest Expenses 16.9 11.3 4.3 3.7
Other Highlights
Consolidated Figures - USIMINAS
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www.usiminas.com.br
Investor Relations:
Bruno Seno Fusaro Luciana Valadares dos Santos Matheus Perdigo [email protected] [email protected] [email protected].: + 55-31-3499-8772 Tel.: + 55-31-3499-8619 Tel.: + 55-31-3499-8056Fax: + 55-31-3499-9357
Gilson Rodrigues Bentes - COSIPA (So Paulo Office)[email protected].: + 55 11 5070-8980
Declarations relative to business perspectives of the Company, operating
and financial results and projections, and references to the growth ofthe Company, constitute mere forecasts and were based onManagements expectations in relation to future performance. Theseexpectations are highly dependent on market behavior, of Brazilseconomic situation, on the industry and on international markets, andare therefore subject to change.
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