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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
2
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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9
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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10
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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11
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
12
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
14
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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
15
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For further information:Investor Relations Team
16
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