Webcast 4q06 Vers

7/31/2019 Webcast 4q06 Vers

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WebcastFourth Quarter 2006 Earnings Results

Paulo Penido Pinto MarquesCFO and Investor Relations Director


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Disclaimer

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Declarat ions relat ive to business perspect ives of t he Company,

operat ing and f inancial result s and project ions, and references t o

t he growt h of t he Company, const it ute mere forecast s and were

based on Management s expect at ions in relat ion to future

performance. These expectat ions are highly dependent on market

behavior, Brazil s economic sit uat ion, t he indust ry and

internat ional market s, and are therefore subj ect t o change.


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3

CONSOLIDATED RESULTS IN 4Q06 AND 2006

R$ mill ion 4Q 2006 4Q 2005 3Q 2006Chg.

4Q06/4Q05

Chg.

4Q06/3Q062006 2005

Chg.

06/05

Total Sales Volume (000 t) 1,992 1,981 1,971 1% 1% 7,945 7,348 8%

Net Revenues 3,277 2,969 3,127 10% 5% 12,415 13,041 -5%

Gross Profit 1,171 912 1,195 28% -2% 4,268 5,415 -21%

Operating Result (EBIT) a 907 743 1,022 22% -11% 3,560 4,760 -25%

Financial Result (45) (162) (91) -72% -51% (332) (666) -50%

Net Income 752 1,325 715 -43% 5% 2,515 3,918 -36%

EBITDA b 1,186 910 1,228 30% -3% 4,368 5,525 -21%

Ebitda Margin 36.2% 30.7% 39.3% +5, 5 pp -3, 1 pp 35. 2% 42. 4% -7, 2 pp

EBITDA (R$/ t ) 595 459 623 30% -4% 550 752 -27%Total Assets 18,975 18,195 18,124 4% 5% 18,975 18,195 4%

Net Debt 760 2,012 1,669 -62% -54% 760 2,012 -62%

Stockholders' Equity 10,418 8,753 10,166 19% 2% 10,418 8,753 19%

(a) Earnings before interest , t ax and part icipati ons.

(b) Earnings before int erest , t axes, depreciat ion, amort izat ion and part icipat ions.

Highlights


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Fast pace of growth in the global economy. China and India with GDPgrowth close to 10%per year

World crude steel production in 2006: 1.2 billion tons, up 9%from 2005

Asia: Strong demand, but declining prices

Europe: Growing demand. Increasing imports from China and pricedecrease

USA: Slowdown in the pace of economic growth. Higher imports fromChina and increase in the supply from local mills

4

STEEL INDUSTRY

Int ernat ional scenar ioInt ernat ional scenario:


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STEEL INDUSTRYDomest ic scenar io:Domest ic scenar io:

Weak performance in the domestic economy. Slow pace of GDPgrowth

Appreciat ion of the Real against the US dollar by 8%, leading to exportlosses

Crude steel production in 2006: 30.9 million tons, down 2%from 2005

Flat steel demand:

2006/2005: up 7%. Segments that stood out following increasedconsumption: automotive, industrial equipment, household appliances

5


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Total sales in 4Q06: 1.99 MMt,4Q06/ 4Q05 = up 1%

4Q06/ 3Q06 = up 1% Domestic sales: up 25%from 4Q05 and

stable from 3Q06

Exports: down 29%from 4Q05 and up4%from 3Q06

Total sales in 2006: 7.95 MMt, up 8%from 2005

6

USIMINAS - CONSOLIDATED SALES

75% 74% 65% 64% 73%72% 71% 71% 78% 70% 69%

75%

74% 65%75%74%65%64% 73%72% 71%71%78%70%69%54% 62%69% 68%

32%

Consolidated Sales (000 t )

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06

Domest ic Market Export Market

72%

75% 74% 65% 64% 73%72% 71% 71%

25%

1,8301,939

26%

1,822

35%

2,119

36% 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%


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7

SALES MIX BY PRODUCT

2006

Hot Rolled

27%

Hot DipGalvanized

5%Cold Rolled

25%

Processed

Products

4%

Heavy Plates22%

Slabs

14%Electro-

Galvanized

3%

2005

Hot Rolled25%

Hot Dip

Galvanized5%Cold Rolled

28%

Processed

Products

4%

Heavy Plates

20%

Slabs

15%Electro-

Galvanized

3%


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Spain

5%

Argentina6%

United States

22%

Thailand

6%

Colombia

3%

South Korea2%

Canada

8%

Mexico

12%

Chile

4%

Germany

13% India

6%

Others

13%

8

EXPORTS BY COUNTRY - 2006


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CONSOLIDATED EBITDA

EBITDA totaled R$ 1.2 billion

(US$ 551 million) in 4Q06 and R$4.4 billion in 2006 (US$ 2.0billion)

EBITDA margin of 36%in 4Q06and 35%in 2006

EBI TDA & EBI TDA Margin

479

565

551

414

404

539

655

646

652

538

422

318

263

225

255

258

34%

39%36%

31%31%

41%

47%

50%48%49%

36%

46%

39%

31%33%

42%

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

3Q06

4Q06

EBITDA (US$ mil l ion) EBITDA Margin


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CONSOLIDATED NET DEBT

CND/ EBITDA at low levels,0.2 x

Debt profi le:

Short Term - 22%Long Term - 78%

Debt by currency:

Domestic - 27%Foreign - 73%

Consolidated Net Debt /EBI TDA

0.

7

0.

8

0.

40.

9

2.

4

2.

6

2.

5

2.

3

2.

2

1.

9

1.

7

1.

3

1.

0

1.

0

1.

0

0.

7

0.4 0.40. 2

0.4

2.72.5

2. 32.1

1.6

2.6

1.1

0.70. 4

0.4 0.4 0.3

1Q 03 2 Q0 3 3 Q0 3 4 Q0 3 1Q 04 2 Q0 4 3 Q0 4 4 Q0 4 1Q 05 2 Q0 5 3 Q0 5 4 Q0 5 1Q 06 2 Q0 6 3 Q0 6 4 Q0 6

CND (US$ bill ion) CND/ EBITDA


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Usiminas cash position totaled R$ 2.7 billion in 2006

4Q06 CONSOLIDATED CASH FLOWBrazilian GAAP (Brazilian Corporation Law) - R$ million

2,7214531597788

325226

1,186

2,000

InitialB

alance

EBITD

A

NewFina

ncing

Amortization

ofF

inancing

Interest

Workin

gCapita

lChange

Investments

Dividends

/Interesto

nCapital

Others

FinalBalance


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PNA and ON shares rose45%and 87%in 2006,respectively, while theIbovespa rose 33%

PNA shares continuesthe fourth most t radedat the So Paulo StockExchange

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ADRADR

LevelLevel II

2006 - STOCK PERFORMANCE

USI M5 and USM3 vs I bovespaFrom 12/ 29/ 2005 to 12/ 28/ 2006

50

70

90

110

130

150

170

190

210

Dec-05 Jan-06 Feb-06 Mar -06 Apr -06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct -06 Nov-06 Dec-06

IBOVESPA USIM5 USIM3

187,1

144,8

132,9


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OUTLOOK

International market :

Inventory adjustments in the US and in Europe. Rising freight costs

Likely reduction in Chinese exports due to expectations for the elimination ofrebates and to the reaction of several countries against the exported volume

Price recovery expected to start in the first half of 2007 Offer / demand stabil it y during the second half of 2007

Domestic market :

Expectation for demand growth over 8%(IBS). Demand will be spurred byrecovery in volumes of heavy plates and by performance of indust rial sectors

Factors that can influence demand:

- reduction in interest rates and maintenance of high credit volumes;- increase in investments on important steel consuming sectors and increased

demand from the main industrial sectors 13


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Total sales: approximately 8.0 mil l ion tons, stablecompared with 2006

Domestic Market : 70%of total sales volume = 6%growth,spurred by demand increase, notably heavy plates

Exports: 30%of total sales

USIMINAS OUTLOOK FOR 2007

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Investment grade rating from Fitch Ratings

Social Statement Award

Guide of the 500 Best Companies Award, granted by theIsto Dinheiro magazine (Usiminas and Usiparts)

Finalist in the 10th Transparency Award 2006

Finalist in all APIMEC Award categories

OTHER HIGHLIGHTS

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For further information:Investor Relations Team

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www.usiminas.com.br/ri_investidores

Bruno Seno Fusaro Luciana Valadares dos [email protected] lsant [email protected]

Phone: 55 31 3499-8710 Phone: 55 31 3499-8619

Matheus Perdigo Rosa Gilson Rodrigues [email protected] [email protected] Phone: 55 31 3499-8056 Phone: 55 11 5070-8980 So Paulo

55 31 3499-8617 B. Horizonte

Webcast 4q06 Vers

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