Apresentação Usiminas

2T11 - APIMEC

Classification of the information: Public

Presentation

1Q17

Agenda

Usiminas and its

business units

Market

Outlook

Financial

Results

Usiminas

Profile

2

Company Profile

3

Complete solution for products and services

Steel company with the largest number of patents rights in Latin America

Largest Research Center in the steel sector in Latin America

First Brazilian steel company to have its quality system certified by ISO 9001 in 1992

First Brazilian steel company and second in the world to achieve the ISO 14001 environmental management

certificate in 1996

Founded of the most enduring environmental education project of the private sector since 1984

Timeline

4

Operation

Start Up

Cosipa

privatization

Launch of ADR I

program on the

OTC Market

(New York)

•Acquisition

of iron ore

mines

•Acquisition

of Zamprogna

•Creation of Soluções Usiminas

•One CNPJ: Usiminas

incorporates Cosipa

•Creation of Mineração Usiminas

•Acquisition of Codeme and

Metform stake

Automotiva

Usiminas

Divestment

•Selling of

Ternium stake

•Joint Mining

Agreements

with MBL e

Ferrous

Entrance of

Ternium / Tenaris

into Usiminas

Control Group

(New shareholders

agreement)

•Usiminas

privatization

•Listing on

BOVESPA

1993

Listing on

LATIBEX

stock

exchange

section

2011

2012 1962

2005

1994

2013

1991

2008

2010

2009

2014

Friables

Project

conclusion

on Mining

(increasing

the capacity

to 12 million

tons/year)

2015

Temporary

shutdown of

the primary

areas in

Cubatão

2016

•R$ 1 billion

capital

increase

•Debt

Renegotiation

2017

Approval of R$

1 billion

Mineração

Usiminas’

capital

reduction

Shareholding Composition

5

*

*

*

*

Grupo de Controle (63,86%)

1,253,079,108

547,818,424 705,260,684 56.28% 43.72%

Usiminas shares are traded on BM&FBovespa (São Paulo), on the OTC Market (New York) and on a LATIBEX

exchange section (Madrid).

Voting Capital

Total Capital

Nippon Group 21.10%

Ternium/ Tenaris Group 19.81%

Usiminas Pension Fund 4.84% Nippon Group

11.31%

Ternium / Tenaris Group 19.76%

Others 23.19%

Control Group: 45.75%

Free Float: 54.25%

Preferred

6

Complete Solution for Products and Services

Business Units

Mineração Usiminas

Mining

Steel

Ipatinga Plant

Cubatão Plant

Unigal Usiminas

Steel Processing

Soluções Usiminas

Capital Goods

Usiminas Mecânica

DOWNSTREAM UPSTREAM

Mining

Steel

Steel Processing

Capital Goods

Strategically Located

7

Social and Environmental Initiatives

8

Usiminas Cultural Institute

Usiminas invested over R$260 million,

encouraging around 2,000 social projects First educational institution in Brazil

to obtain ISO 9001

São Francisco Xavier School

Márcio Cunha Hospital

Reference center in healthcare all over Brazil

Xerimbabo Usiminas Project

Promotes protection and environmental education

free of charge for more than 2 million young people

Agenda

Usiminas and its

business units

Market

Outlook

Financial

Results

Usiminas

Profile

9

World Crude Steel Market in 2016

Million Tons

Source: World Steel Association/OECD 10

Nominal

Capacity

2,351

Production

1,610

Excess of Capacity 741

24.2

30.2

33.2

42.1

68.6

70.8

78.6

95.6

104.8

808.4

Ukraine

Brazil

Turkey

Germany

South Korea

Russia

USA

India

Japan

China

10% 2%

6%

7%

2% 1%

50%

21%

World Crude Steel Production

1,149 million tons 1,610 million tons

11 Source: World Steel Association

2016 2005

*Except China

*

17%

2%

12%

11%

4% 2%

31%

21% European Union

Europe (others)

Others

North America

South America

Africa

China

Asia and Oceania

+40%

1980 2000 2015

China 34 98 489

South Korea 160 818 1.113

Japan 611 601 497

United States 376 425 297

Germany 469 475 484

Spain 202 435 275

Brazil 101 93 103

Mexico 120 142 191

World Average 152 133 208

Source: World Steel Association

Crude Steel Consumption per Capita

Kg per habitant

12

Brazilian Flat Steel Apparent Consumption

Evolution Quarterly - Thousand Tons

13 Source: Usiminas – Commercial Planning

766 761 805 821 825

1,263 1,351 1,467

1,317 1,316

118 138

162 281 311 2,147

2,250

2,434 2,419 2,452

1Q16 2Q16 3Q16 4Q16 1Q17

Usiminas Other Companies Imports Total

Auto Industry

and Autoparts Oil and Gas Pipelines

Agricultural and

Road Machinery

Heavy Plates and

Hot Rolled

Civil

Construction

Household

Appliances

Cold Rolled and

Galvanized

14

Flat Steel Consumption Markets

Hot Rolled,

Cold Rolled and

Galvanized

Heavy Plates,

Hot Rolled,

Cold Rolled and

Galvanized

Heavy Plates and

Hot Rolled

Heavy Plates and

Hot Rolled

Agenda

Usiminas and its

business units

Market

Outlook

Financial

Results

Usiminas

Profile

15

HDG Placas Laminados a

Quente

Eletrogalvanizados

2,200

Optimized

Rolling

Capacity

4,200 1,900 1,020 350

Cubatão Plant - 1,200 -

3,700 Nominal

Capacity 8,000 2,000* 9,500* 1,050 360

-

Ipatinga Plant 1,050 360 2,500 3,600 1,000 5,000

Flat Steel Capacity of Production

16

Thousand Tons

Slabs Hot Coils Cold Coils Heavy Plates Slab Caster EG

Galvanized

* Temporary shutdown of the primary areas of Cubatão

2,100 ** 1,000** 4,500*

2.300

** Temporary shutdown of the rolling mills

17

Sales Volume

Steel Business Unit – Quarterly - Thousand Tons

758 784 814 821

825

145 115 145

71 105

903 899

959

891 930

1Q16 2Q16 3Q16 4Q16 1Q17

Exports Domestic Market

18

Steel Business Unit

Exports – Main Markets

36%

35%

8%

5%

4%

3% 3% 3%

2% 1%

0%

0%

1Q17

20%

46%

0%

6%

0%

8%

4% 1%

1% 0%

0% 13%

4Q16

Germany

Argentina

United Kingdom

Mexico

Switzerland

China

USA

Spain

Portugal

Belgium

Canada

Others

Steel Business Unit

19

Cost of Goods Sold - COGS

33%

17%

12% 11%

10%

8%

7%

4%

-13%

11%

4Q16

31%

17%

16% 12%

10%

7%

7%

4%

-11%

7%

1Q17

Other Raw Materials

Labor (direct and indirect)

Coal and Coke

Iron Ore and Pellets

Structural Expenses

Energy and Fuels

Depreciation

Spare Parts

Inventories Variation

Others

72 1 (2) 1

1 (37) (42) (35) (14) (23)

(14) (2) (34) (1)

25 93

332 342

488

(71)

46 50

295 224

465 3% 3%

14%

11%

21%

1T16 2T16 3T16 4T16 1T17

20

Adjusted EBITDA and EBITDA Margin

Steel Business Unit – Quarterly - R$ Million

Capacity increase to generate finished products

7.2 million t 9.7 million t

(2010) (2014)

Investments

21

Steel Business Unit

Slabs

Heavy Plates

Hot Rolled Cold Rolled

Hot dip galvanized Electrogalvanized

Start up in 2010

Meets the requirements of

Petrobras, focused on pre-

salt, besides the

shipbuilding sector

CLC Technology (Accelerated Cooling Process for Heavy Plates)

Galvanizing Line

Start up in 2011

Double the capacity to 1

million tons /year

Higher expertise in ultra-

resistant steel production

(dual phase)

22

Investments

Steel Business Unit

Start up in 2012

Capacity to process 2.3 million

tons / year

Improving products’ portfolio

(beams, ultra resistant wheels,

higher grades API’s)

Hot Strip Mill

Start up in 2013

Capacity to process 1.7 million

tons / year

Better thickness tolerance,

flatness and surface controls

of materials for wheels, beams

and compressors

Pickling Line

23

Investments

Steel Business Unit

o Met coke with adequate specifications for pig iron production in the blast furnace process

o Started up on May 2015

24

Coke Plant Revamp - Ipatinga

o Reduction of particle emissions, gases and volatile substances

o Coke gas to be used in the operational

facilities of Ipating Mill and electric energy

production

o Coke plant total capacity of 1,1 million

tons/year

Mainly Investment Concluded in 2015

Steel Business Unit

o Located in Serra Azul/Minas Gerais state

o 4 mining sites, acquired from J. Mendes in February, 2008

o Reserves of 2.6 billion tons of iron ore

o It has 20% of voting shares of MRS Logistica, being part of the Control Group

o Retroarea in Itaguaí Port

Description

25

Mining Business Unit

70%

30%

Shareholder Composition Production Capacity

Lump 2 million

Sinter Feed

4 million

Pellet Feed

6 million

MBL

Arcelor Mittal

Ferrous (Santanense)

Comisa Emicon

MMX

Ferrous

MUSA Pau de Vinho

MUSA Leste

Minerita

MUSA Central

MUSA Oeste

Itatiaiuçu

Igarapé São Joaquim De Bicas

Mineração Usiminas

Location

Mining Business Unit

26

Increased capacity from 8 million to 12 million tons / year of iron ore

Iron ore with better quality, higher concentration of iron content and

lower impurity level

Two iron ore processing plants

Friables Project

27

Investments

Mining Business Unit

28

Sales Volume

Mining Business Unit – Quarterly - Thousand Tons

614 592 608 588 615

16 23

181

69 28

344

171

-

-

974

786 789

657 643

1Q16 2Q16 3Q16 4Q16 1Q17

Sales to Usiminas Sales to 3rd parties - Domestic Market Exports Total

Iron Ore Price – PLATTS (62% Fe CFR China)

US$/ton

29

48 56 59

71

86

1Q16 2Q16 3Q16 4Q16 1Q17

30

(4) (3) (1)

2 0

(12)

21

13

24

52

-11%

21%

16%

30%

48%

1Q16 2Q16 3Q16 4Q16 1Q17

Sale of Energy Reported EBITDA Reported EBITDA Margin

Adjusted EBITDA and EBITDA Margin

Mining Business Unit – Quarterly - R$ million

o 8 industrial units in different Brazilian states:

MG, SP, RS, ES, BA and PE

o Processing capacity of 2 million tons of

steel/year

o Net Revenue of R$1.3 billion in 9M16

Description

Soluções Usiminas - Steel Processing

31

Porto Alegre

São Paulo Guarulhos

Taubaté

Recife

Serra

Betim

Santa Luzia

Adjusted EBITDA and EBITDA Margin Steel Processing – Quarterly - R$ million

32

3

14

22

9

37

1%

3% 4%

2%

7%

1Q16 2Q16 3Q16 4Q16 1Q17

Reported EBITDA Reported EBITDA Margin

o Facilities in Ipatinga/Minas Gerais state, Congonhas/Minas Gerais state and in

Cubatão/São Paulo state

o Market Segments: Steel Structures, Shipbuilding and Offshore, Oil and Gas, Industrial

Assembly and Equipment, Foundry and Railcars

o Net Revenue of R$462 million in 9M16

Usiminas Mecânica - Capital Goods

Description

33

Brasília 3rd Bridge

33

Steel Structures

Adjusted EBITDA and EBITDA Margin Capital Goods - Quarterly - R$ million

34

8 10

1

(7) (4)

5%

6%

1%

-7%

-5%

1Q16 2Q16 3Q16 4Q16 1Q17

Reported EBITDA Reported EBITDA Margin

Agenda

Usiminas and its

business units

Market

Data

Financial

Results

Usiminas

Profile

35

72 1 (2) 0 1

(41) (44) (36) (12) (23) (17) (6) (33) (4)

37 117

344 350

559

(71)

3% 3%

14%

11%

23%

1T16 2T16 3T16 4T16 1T17

307 234

68 52

533

36 36

Adjusted EBITDA and EBITDA Margin Consolidated – Quarterly - R$ million

37

Comparing Adjusted and CVM 527 EBITDA Consolidated – R$ Thousand

1Q17 4Q16 1Q16

Net (Loss) Income 108,318 (194,971) (151,377)

Income Tax / Social Contribution 58,855 418,323 (15,360)

Financial Result 54,581 87,053 (101,553)

Depreciation, Amortization 306,341 273,502 318,086

528,095 583,907 49,796

Joint Subsidiary Companies proportional EBITDA 27,973 27,973 45,597

Impairment of Assets - (350,449) 8,030

532,769 234,117 51,578

(51,845)

Adjusted EBITDA

Consolidated (R$ thousand)

Equity in the Results of Associate and Subsidiary

Companies(37,080) (27,314)

EBITDA - Instruction CVM - 527

2,177

14 16 78

333

608

875 875 875 875

647

239

0

548 15

73

137

199 199 199 199

149

2,416

14

564

93

406

745

1,073 1,074 1,074 1,073

796

Cash 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Local Currency Foreing Currency

Debt Profile (Principal)

Consolidated - R$ Million

38

Duration: R$: 51 months US$: 51 months

39

Cash Position and Indebtedness (with interest money)

Consolidated - R$ Million

1,736

2,713 2,340 2,257 2,416

5,692 4,525

4,609 4,684 4,464

7,428 7,238 6,948 6,942 6,879

1Q16 2Q16 3Q16 4Q16 1Q17

Net Debt Cash Gross Debt

40

CAPEX Consolidated - R$ million

64

42

25

48

18

4

6

10

14

3

2

3

2

5

3

70

50

37

67

23

1Q16 2Q16 3Q16 4Q16 1Q17

Others Mining Steel

41

G&A Evolution

Consolidated - R$ million

90 86 87

91 93

4.4% 4.2%

3.9%

4.3%

4.0%

1Q16 2Q16 3Q16 4Q16 1Q17

G&A G&A/Net Revenues

42

Working Capital

Consolidated – R$ billion

2.2 2.1

2.4 2.5

2.6

1Q16 2Q16 3Q16 4Q16 1Q17

484

439 443

648 648

1Q16 2Q16 3Q16 4Q16 1Q17

43

Inventory

turnover

(days)

63 65 42 44 48

Working Capital – Steel Inventories

Thousand Tons

(41)

3

266 259

481

(320) (293)

(34)

283

185

(151) (123) (107)

(195)

108

1Q16 2Q16 3Q16 4Q16 1Q17

Gross Profit EBIT Net Income

44

USD/BRL 3,904 3.558 3.210 3.246 3.259 End of period

*

*Reversion of impairment in the Mining Unit of R$357.7 million,

Gross Profit, EBIT and Net Income - Quarterly

Consolidated - R$ million

Income Statement Per Business Unit – R$ million - Quarterly

Note: All intercompany transactions are made at arm´s length basis 45

R$ million

1Q17 4Q16 1Q17 4Q16 1Q17 4Q16 1Q17 4Q16 1Q17 4Q16 1Q17 4Q16

Net Revenue 108 79 2,219 1,959 567 480 83 106 (626) (504) 2,351 2,120

Domestic Market 108 79 1,978 1,797 567 480 82 105 (626) (504) 2,110 1,958

Exports - - 240 161 0 0 1 1 - - 241 162

COGS (53) (47) (1,798) (1,725) (512) (453) (82) (103) 575 467 (1,870) (1,861)

Gross Profit (Loss) 55 31 421 233 55 27 1 4 (51) (36) 481 259

Operating Income (Expenses) (42) 319 (218) (246) (26) (26) (11) (25) 1 2 (296) 24

EBIT 13 350 203 (13) 29 2 (10) (21) (50) (35) 185 283

Adjusted EBITDA 52 24 465 224 37 9 (4) (7) (16) (15) 533 234

Adj.EBITDA Margin 48% 30% 21% 11% 7% 2% -5% -7% 3% 3% 23% 11%

Income Statement per Business Units - Non Audited - Quarterly

ConsolidatedMining Steel* Steel Processing Capital Goods Adjustment

Declarations relative to business and 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 Management´s

expectations in relation to future performance, these expectations are highly

dependent on market behavior, on Brazil´s economic situation, on the industry

and on international markets, and are therefore subject to change.

ADR

Level I

www.usiminas.com/ri

Cristina Morgan C. Drumond Head of IR

cristina.drumond@usiminas.com

Phone: 55-31-3499-8772

Fax: 55-31-3499-9357

Leonardo Karam Rosa IR Manager

leonardo.rosa@usiminas.com

Phone: 55-31-3499.8550