3Q10

Agenda
Overview 3Q10 - Highlights Business Units

Agenda
Overview 3Q10 - Highlights Business Units

Shareholder Composition

Voting Capital
Control Group:
63.9% of Voting Capital
Nippon Group

Total Capital
Control Group: 31.8%
63.9% of Voting Capiutal

26.0%
10.1%
Grupo Votorantim / Camargo Corra Usiminas Pension Fund

12.9%

13.8%
ONs

5.0% 12.3%

5.8%

27.8%

ONs

Free Float

PNs

10.4%

25.7%
Previ

50.2%

Usiminas
Complete solution of services and value added products through its Business Units:
Mining Steel Steel Procecessing Capital Goods

Minerao Usiminas *

Ipatinga Cubato Unigal Usiminas Ternium stake **

Solues Usiminas Automotiva Usiminas Metform and Codeme stake **

Usiminas Mecnica

UPSTREAM
* Controled by Usiminas ** Results accounted through equity income

DOWNSTREAM

Strategically Located

Ipatinga Mill

Cubato Mill

Mining
Steel

Logistics

Steel Processing Capital Goods

6

Business Strategy
UPSTREAM INTEGRATION
Protection against transfer of margin in the value chain Keep competitiveness of production costs

CAPACITY EXPANSION
Take advantage of domestic market growth, capturing a premium for the logistics gains Capture competitiveness from access to local competitive raw material and labor

DOWNSTREAM INTEGRATION
Assure presence in growing markets Integrate and create value in new market niches

PRODUCT PORTFOLIO EXPANSION

Assure maximum potential of value creation Reduce dependence of few product lines Assure presence in growing markets

INTERNATIONALIZATION
Assure access to markets outside Brazil Accelerate growth Diversify and keep close to sector leaders
7

Domestic Market
Benefit from the Brazilian positive outlook

GDP forecast: 2010: ~ 7% 2011 2014: ~5.5% p.a. Apparent crude steel consumption is estimated to increase by more than 40% in 2010

Source: Central Bank of Brazi / IABR / CRU / Usiminas

8

Domestic Market
Medium and long term projects

2009-2015

2010-2014

2011-2016

~ US$ 224 billion

~ US$ 55 billion

~ US$ 12 billion

Source: Petrobrs / Tendncias Consultoria

9

Agenda
Overview 3Q10 - Highlights Business Units

10

Results 3Q10
Highlights*
Sales thousand tons
+27%

Net Revenues R$ Million

4,986
+13%

+24%

9,870

-9%

3,929 1,550

7,940 3,241

1,694

2,858

3Q09

3Q10

9M09

9M10

3Q09

3Q10

9M09

9M10

Ebitda R$ Million
2,318

Net profit R$ Million

1,171

+160%

+91% +14%

417

735
+76%

892

433

495

614

3Q09

3Q10

9M09

9M10

3Q09

3Q10

9M09

9M10

*IFRS
11

Ebitda
R$ Million*

6,008

38.3%

23.4% 13.6%
1,486 711

24.3%

22.7%

872

735

2008

2009

1Q10

2Q10

3Q10

*IFRS
12

Debt
Focus in strong cash position and low indebtedness
R$ Million

Consolidated Net Debt / EBITDA (R$)

0.8

1.0

1.3

1.9

1.7

1.5

1.6

4.3

3.8

3.1

503
1Q09 2Q09 3Q09 CND (R$ bi)

4Q09

2.8

1Q10

3.3

2Q10

4.1

3Q10

CND/EBITDA

Debt Duration:

4.9

3,928

R$: 4.9 years US$: 5.0 years

3425 1,048 788 378 410 595

1,431

1,262 1,089 463

1,232 782
564 218 397 181 216

682

348

818 214 0 214 214 0 214 146 0 146

235 64 171

453

749

799

741

414

Cash

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021 on

Foreign Currency

Local Currency
13

Agenda
Overview 3Q10 - Highlights Business Units

14

Results Accounted by Business Unit

R$ Million* (Non Audited)

Income Statement per Business Units - Non Audited

R$ million

Mining 3Q10 2Q10 9M10 9M09

Steel 3Q10 2Q10 9M10 9M09 2.846 3.276 8.943 6.936

Steel Processing 3Q10 2Q10 9M10 9M09 620 668 1.842 1.451

Capital Goods 3Q10 2Q10 9M10 9M09 389 375 1.056 661 (535) 126 (51) 75 90 14% 3Q10 3.241

Consolidated 2Q10 3.586 9M10 9M09 9.870 7.940

Net Revenues COGS Gross Profit Operating Income (Expenses) EBIT EBITDA EBITDA Margin

291

277

726

299

(69) (70) (205) (114) (2.351) (2.777) (7.407) (6.619) (559) (575) (1.615) (1.359) (340) (332) (919) 222 207 521 185 495 (138) 357 514 18% 499 (124) 375 607 19% 1536 (396) 1140 1711 19% 317 (385) (68) 566 8% 61 93 227 92 (137) (45) (17) -1% 49 43 137

(2.438) (2.760) (7.541) (7.122) 803 (249) 554 735 23% 826 (213) 613 871 24% 2329 (657) 1672 2317 24% 818 (624) 194 892 11%

(25) (17) (60) (51) 197 190 461 134

(49) (48) (119) 12 22 4% 45 56 8% 108 139 8%

(37) (24) (82) 12 19 5% 19 26 7% 55 76 7%

204 198 483 155 70% 72% 67% 52%

*IFRS

Note: MRS and Ternium results are accounted through equity on Equity Income.
15

Steel

Ipatinga Cubato

Ternium

16

Steel Production
Usiminas is the largest flat steel producer in Latin American
2009 Crude Steel
Brazil: 26.5 Million tons
Flat Steel
5,637 5,334 4,375
568

World: 1.22 Billion tons

88

60

58

57

49

33

30

27

25

10

Source: Instituto Ao Brasil

Source: WorldSteel
17

Brazilian Market Flat Steel

Production thousand tons
4,082 3,972 3,734 3,528 3,793 2,923 3,257 3,754

Apparent Consumption thousand tons

4,200 3,979

3Q09

4Q09

1Q10

2Q10

3Q10

3Q09

4Q09

1Q10

2Q10

3Q10

Inventories in the Distribution Network (flat )

3.9 3.4 3.5 3.8 3.3 3.1 2.6 2.3 2.4 2.3 2.4 3.0 2.6 2.6 2.1 1,040 951 851 808 942 906 849 805 761 758 761 766 786 771 764 815 908 2.7 3.2 1,168 4.0 1,255 3.9 1,255 3.9 1,221

3.6

jul/09

jan/09

mar/09

jan/10

mar/10

jun/09

aug/09

jun/10

jul/10

may/09

may/10

nov/09

aug/10

apr/09

sep/09

apr/10

feb/09

feb/10

oct/09

Source: IABR / INDA

thousand tons

dec/09

monthly basis
18

sep/10

Flat Steel Production

Usiminas has a full range of flat steel products
Installed Capacity : 9.5 million tons / year

Slab Caster Heavy Plates

EG

HDG Slab Hot Coils Cold Coils

Ipatinga Plant Cubato Plant

5,000 kt

1,000 kt

3,550 kt

2,500 kt

360 kt

480 kt

4,500 kt

1,000 kt

2,100 kt

1,200 kt

19

Domestic Market
Usiminas is focused in the domestic market with a product range to supply different sectors

thousand tons

Export Market

Domestic Market

1,693 1,694
33%

1,703
29%

1,615
27%

1,821
21%

1,550
20%

6% 3% 8% 7%

4%

17% 11%

Auto parts

Auto Industry
Small Diam. Tubes Civil Construction and Shapes

Industrial equipment
Eletronic Equipment Large Diam. Tubes House Hold Appliances

67%

71%

73%

79%

80%

7%
15%

22%

Distributors
Other

3Q09

4Q09

1Q10

2Q10

3Q10

20

Investments
The Steel Unit is going through a strong investment cycle pointed to value creation and cost reduction
R$ Million
3500

Accum. Sept./2010: R$2.2 billion

3,194

3000

2500

2,225 2,060 2,000

Average: 1,659

2000

1500

1,324 929 593

Average: 674

1,194

1,086 839 674

1000

495 345

544

500

468

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 New Cycle 2012 2013 2014

21

Investments
Adding value and reducing costs
New Coke Facility #3
Additional production of 750,000 tons/year Ipatinga Plant Start-up: 3Q/2010

Heavy-Plate Mill Rolling Mill - Ipatinga

CLC Accelerated Cooling Technology meeting the requirements of the pre-salt exploitation projects. Start-up: 3Q/2010.

22

Investments
Adding value and reducing costs
New Hot Dip Galvanizing Line (Unigal II)
Additional production of 550,000 tons/year Ipatinga Plant. Start-up: 1Q/2011

New Hot Strip Mill #2

Additional production of 2.3 million tons/year Cubato Plant (stage 01). Start-up: 2Q/2011

12,000 jobs created in Ipatinga and Cubato.

23

Unigal Usiminas
Ipatinga MG.
Joint-venture between Usiminas (70%) and Nippon Steel (30%) aimed at processing hot-dip galvanized coils. Processing capacity of 480 thousand tons/year.

2009 Gross Revenues of R$277 million Market Sectors:

Galvanized steel is used mainly by the auto, household appliance and civil construction industries.

Investments:
550,000 expansion in HDG capacity. R$ 914 million capex. Start-up: 1Q 2011
24

Mining and Logistics

Conceio do Mato Dentro Ipatinga Itabira

Belo Horizonte
Itana

Sabar

Vitria
Mariana TUBARO Port

Jeceaba

Trs Rios Barra do Pira B. Mansa So Paulo Itagua ITAGUA Port

Cubato CUBATO Port

Santos

25

Logistics
540 kton/ms

MODAL MODAL

Minerao Usiminas

1.000 kton/ms

TCS / TSA TCS / TSA

IPATINGA Mill

EFVM
Tinaga Trammel

CUBATO Mill / Port

Existing Routes New Routes

Sepetiba Port

1.000 kton/ms

Porto Itagua Port Ing (Ing)

Porto Tubaro Port Tubaro

1.000 kton/ms

Exports

Exports

Exports

26

Mining and Logistics

Current status
4 mining sites, acquired from J. Mendes Group in Feb./2008 Located in Serra Azul-MG, one of the richest iron ore sites in Brazil. Production MM ton:
5,5 7,0

3,8

+ 44%

2008

2009

2010

Sept./2010: production record of +600 thousand tons. MRS: 20% of voting shares and part of the Control Group.

Land in Itagua-RJ, acquired in 2008.

27

Mining and Logistics

Strategic partnership

Acquisition, by the Japanese group Sumitomo Corporation, of 30% of Minerao Usiminas S.A., through the subscription of new shares, at the total maximum price of US$ 1.929 billion.
70%

30%

Estimated Market Value Minerao Usiminas S.A.: US$ 6.4 bi

28

Development Plan
Iron Ore Production million tons
29 25
Pellet Feed
23

7
5 2
2010

10 8
6 2
2011 2012

11
2 6 2
2013

19 5 4 2
2014

Sinter Feed

4 2
2015

4 2

Lump

Capex until 2015 are estimated in R$ 4.1 billion including industrial facilities projects , equipments, loading terminals, etc. Reserves of 2.6 billion tons.

29

Steel Processing
Solues Usiminas
Recife

Betim Santa Luzia Serra Campo Limpo Paulista Taubat Guarulhos So Paulo

Caxias do Sul

Cachoeirinha Porto Alegre

30

Solues Usiminas
14 industrial units, in MG, SP, RS, ES and PE. Processing capacity of 2 million tons/year. 2009 Gross Revenues of R$1.6 billion Leadership:
In 1Q10, took over the leadership in the steel distribution sector, according to INDA.

Investments:
25% expansion in blanks production capacity (70,000 tons) of Taubat plant (SP), to supply the auto industry. Up to April/2011.

31

Steel Processing
Automotiva Usiminas

Pouso Alegre

500km

1.000km

1.500km

Clients

32

Automotiva Usiminas
Pouso Alegre MG
Close to major auto makers. Full service company

2009 Gross Revenues of R$278 million

Major Clients:
Ford, Mercedes Benz, Fiat, Volkswagen, Volvo, General Motors, International Trucks, Honda Toyota, PSA Peugeot Citron, Scania.

Highlights:
2009 - FIAT Qualitas Awards - Metallic Supplier

33

Capital Goods

34

Usiminas Mecnica
Ipatinga MG.
The Groups capital goods arm is one of the largest capital goods companies in the country.

2009 Gross Revenues of R$1.1 billion Market Sectors:

Structures and Metal Bridges. Industrial Equipments. Industrial Assembly. Blanks and Stamping. Funding, Forgery and Railcars. Steel EPC Unit. (Engineering Procurement Construction) Oil and Gas EPC Unit.

35

ADR Level I

Investor Relations Bruno Seno Fusaro

Head of IR bruno.fusaro@usiminas.com Phone: 55-31-3499.8772 Fax: 55-31-3499.9357

Gilson Rodrigues Bentes

gilson.bentes@usiminas.com Phone: 55-31-3499.8617

Matheus Perdigo Rosa

matheus.rosa@usiminas.com Phone: 55-31-3499.8056

Diogo Dias Gonalves

diogo.goncalves@usiminas.com Phone: 55-31-3499.8710

Luciana Valadares dos Santos

luciana.santos@usiminas.com Phone: 55-31-3499.8619

www.usiminas.com/ri
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, on Brazils economic situation, on the industry and on international markets, and are therefore subject to change.