CORPORATE PRESENTATION May 2012

Transcription

1 CORPORATE PRESENTATION May 2012

2 Timeline CSN Share Ownership December 31, 2011 RIO IACO CBS 4.0% 0.9% VICUNHA 47.9% % BNDESPAR 1974/ Expansions in Volta Redonda Steel Mill ADRs 25.6% Bovespa 19.4% 1993 CSN privatization 1996/2002 CSN invested US$2.4 Billion in technological advances 2005 Casa de Pedra and Itaguaí Terminal expansions begin 2007 First iron ore export shipment 2008 Sale of 40% of NAMISA 2009 Cement plant Start - Up 2012 Acquisition of SWT 1941 Operational start-up CSN is founded 2 2

3 Competitive Advantages Fully integrated business model: high quality operations (steel, mining and cement) with logistic infrastructure and self-sufficiency in energy generation; Low cost structure and high profitability; Pricing power based on a large and diversified customers portfolio; Exposure to different business segments and diversified product portfolio; Strong presence in Brazilian steel market (one of the highest average price worldwide); Growing exposure to the iron ore market (very consolidated base of suppliers with strong pricing power); Strong liquidity and cash generation; Resilient performance in adverse market conditions; Experienced management team. 3 3

4 CSN - Key Business Areas Steel Mining Cement Logistics Energy Flat Steel Long Steel Casa de Pedra NAMISA & Tecar Cement Plant MRS Railway & Transnordestina Itaguaí Logistics Platform Tecon Thermal & Hydro Electric Plants Net Revenues % of % 35% 10% Key Business Highlights 5.6 mt of flat steel (2011 capacity). # 2 flat steel producer in Brazil Focus on high margin products. Acquisition of German long-steel producer SWT, with annual installed capacity of 1.1 mt of steel profiles. # 6 globally in iron ore production (29 mt in 2011). CSN is self-sufficient in iron ore production. CSN has the concession to operate TECAR, from which CSN exports iron ore and imports coke and coal. Operations started in May Uses CSN's blast furnaces byproducts and own limestone reserves. Current sale capacity: 2.4 mtpy Developed transport infrastructure, from iron ore mines to steel mills and ports MRS Railway connects the Volta Redonda Steel Mill to Casa de Pedra and terminals at Itaguaí Port, which handles steel exports. CSN has the concession to operate TECON, one of the largest ports in Brazil. Apart from containers, TECON also handles CSN s steel products and general cargo. CSN is selfsufficient in energy production. Total energy capacity available: 428 MW (average). 4 4

5 CSN, an Integrated Company Self-sufficiency in practically all relevant raw materials for steel production, specially captive iron ore mines and power plants, along with equity participation or operating concessions of outstanding infrastructure assets, positions CSN not only as a truly low-cost producer but also one of the most independent and profitable steel producer worldwide. Lime & Dolomite mine (Arcos) 260 miles Iron Ore mines (Casa de Pedra & NAMISA) 200 miles MRS railway (equity of 33%) Brazil MG RJ FCA railway São Paulo (Brazilian largest market) 270 miles Angra Port FCA MRS Volta Redonda Steel Facility Rio de Janeiro Rio de Janeiro Port 80 miles Itaguaí Port 60 miles Iron ore & Coal Terminal and Conteiners Terminal (controled by CSN) 5 5

6 STEEL 6 6

7 Steel Figures Apparent Consumption of Steel Products in Brazil (Mt) Brazil's Imports of Steel (Mt) Total Steel Products Flat Products Long Products Source: IABr 7 7

8 Import Parity - Different FX Scenarios Hot Rolled Sheet Import Parity (USD/t) FOB Price Ocean Freight Insurance CIF Price Import Tax FMM Tax Port Expenses Other Costs All-in price of imported Steel Hot Rolled Price in Brazil (R$) Commodity Grade without Extras 1,500 1,500 1,500 FX Domestic Price in USD Premium (2%) (4%) (7%) 8 8

9 Steel Sales Volume and Net Revenues Sales Volume Net Revenues (Thousand t) 5,378 4,891 4,110 4,796 4,896 (BRL MM) 9,545 10,566 8,201 9,926 9,478 3,615 4,157 3,243 4,135 4, Domestic Market Sales abroad Export Sales by Products 2011 Domestic Sales by Segment 2011 (t) 13% (t) 13% 40% 45% 47% 19% 30% 11% 17% Tin Plate Galvanized Cold Rolled Hot Rolled 12% Automotive Construction Distribution Home Appliance/OEM Steel Packaging 9 9

10 Increase of Steel Capacity Production of 500,000 tons/year of long steel, such as CA50 rod bar (400Kt) wire rod (100Kt); CSN will benefit from the existing infrastructure and utilities in Volta Redonda steel mill; The total investment in long steel production will be of approximately R$ 1.2 billion (R$ 670 million of which are already invested), including expansion and acquisition of an electric furnace; 10 10

11 SWT Location and Background Stahlwerk Thüringen GmbH Location: Unterwellenborn, Thüringen Steel production capacity: 1.1 mt of steel profiles Jan/07 => SWT aquired by Alfonso Gallardo Group, leader in the production of rebars in Spain

12 SWT Overview Plant: The rolling mill, in operation since 1985, was completely revamped in 2002 and remains in good conditions, without the need for maintenance investments to achieve full capacity; Raw material supply: 70% of scrap comes from a radius of km, with a cost advantage to competitors in Germany; Logistics: SWT possesses an internal railway system with 28 km, 4 locomotives and 100 wagons. It also possesses logistics infrastructure to ensure supply of scrap and delivery of finished products; Products: Over 200 types of metallic profiles, produced in accordance with national and international standards, to be used in buildings, mezzanines, stadiums, bridges, overpasses, walkways, foundations, retaining walls, sheds, cranes, etc. The profiles have the following standards: AMERICAN EUROPEAN W S HP C IPE HE HP UPE U W: American wide flange shapes S: American standard beams HP: American wide flange bearing piles C: American standard channels IPE: European I beams HE: European wide flange beams HP: Wide flange bearing piles UPE: Channels with parallel flanges U: European standard channels Markets: non-residential construction, equipment industries, engineering and transport, in Germany and neighboring countries (Poland and Czech Republic)

13 MINING 13 13

14 World Mining Figures Published Prices Indexes Ocean Freight Rate ($/wmt) Source: Platts, TSI, Metal Bulletin, The Baltic Exchange and Umetal 14 14

15 (t) % 49% % 79% 2008 (1) Total sales volume reflects 100% of NAMISA sales. Domestic Market Sales by Products (3) % Iron Ore Sales Volume and Net Revenues Sales Volume (1) Net Revenues (2) (Million t) % 97% % 94% % 5% 95% 2011 Exports (BRL MM) (t) , , , (2) Net revenues are consolidated, considering 60% of NAMISA sales since Dec/08, given the acquisition of 40% of NAMISA by the Asian Consortium. Exports Destination (3) % 4.6% 5, % 20.8% 34.9% 65.9% 15.7% 18.9% Lump Ore Sinter Feed Concentrate Pellet Feed (3) 100% of NAMISA China Middle East South Korea Europe Singapore Japan 15 15

16 Iron Ore Project Expansion Mining Casa de Pedra Mine Current capacity : 21 mtpy CSN Consumption: 7 mtpy Future capacity: 70 mtpy NAMISA (60% ownership) Current capacity: 6.8 mtpy Future capacity: 33 mtpy Acquisition from third-parties: 6.0 mtpy Future sales: 39 mtpy Logistics Itaguaí Port TECAR: exports iron ore and imports coke and coal Current capacity: iron ore shipments of 30 Mtpy and coal and coke unloading capacity of 4 mtpy Future capacity: iron ore shipments of 130 Mtpy and coal and coke unloading capacity of 8.5 mtpy Railway MRS (33.27% ownership) Namisa/ Sarzedo Namisa/ Engenho CSN Casa de Pedra Steel Railway - MRS São Paulo Cosipa z Santos Belo Horizonte CSN Itaguaí Port Nova Lima Gerdau - Açominas Volta Redonda Steel Mill Cosigua Rio de Janeiro Usiminas Acesita MRS EFVM CST Vitória Namisa/ Fernandinho Atlantic Ocean CSN/ NAMISA Facilities LOADING TERMINALS VALE S MINES CITIES STEEL MILLS 16 16

17 CEMENT 17 17

18 Cement Figures Apparent Consumption in Brazil Consumption Per Capita ,008 64,692 1,380 51,571 51,892 39,710 38,912 38,873 34,884 35,734 37,666 41,027 45,062 1, Kt Per Capita (kg/inhabitant) China Vietnam South Korea Turkey Egypt World Russia Brazil USA India 18 18

19 Cement Production CSN began producing and selling cement in May/09; Sales Volume The Company takes advantage of the limestone reserves (Thousand t) 1,755 in Arcos and the slag generated by CSN s blast furnaces; Apart from the plant in Volta Redonda which has an annual grinding capacity of 2.4 mt, CSN plans to expand 992 grinding capacity to 5.4 mt; Target clinker capacity expansion is 3.0 mt, from a 338 current capacity of 800,000 tons; Until 2011, R$ 800 million were already invested Net Revenues (R$ MM)

20 LOGISTICS 20 20

21 Logistics Railways and Port MRS Railway Itaguaí Port Nova Transnordestina MRS Logística is a publicly held company with a concession to operate Brazil s Southeastern railway system CSN holds directly and indirectly 33.27% of MRS total share capital, sharing control with Vale and Usiminas Net Revenues: R$ 2,862m in 2011 EBITDA: R$ 1,186m in 2011 EBITDA Margin of 41.4% in 2011 Net Income: R$ 521m in 2011 Total carloads: mt in 2011 Concession: November 1996 Concession Maturity: October 2026 (30 years renewable) TECON: exports CSN s steel products and export third-party containers Current capacity: general cargo and steel products (2 mtpy) and containers (480 K TEUpy); Future capacity: general cargo and steel products (6 mtpy) and containers (610 K TEUpy). Legend CSN owns 66% of the total share capital (in September 2011) 1,728 km of track will be built creating the Nova Transnordestina When completed, the railroad will connect the northeastern cerrado to Pecém/CE and Suape/PE Ports The railroad will transport mainly grains, fertilizers, ores and fuels Locos: 100 (current) Cars: 1,700 (current) Existing Railway Nova Transnordestina Railway in process of remodeling PA PA SÃO LUÍS Sobral Porto de Pecém FORTALEZA MA TERESINA CRATEÚS Limoeiro do Norte CE PIQUET CARNEIRO Jucurutú RN NATAL Balsas Uruçuí PI Ribeiro Gonçalves Eliseu Martins Crato MISSÃO VELHA ARARIPINA PARNAMIRIM SALGUEIRO PE C.Grande PB Caruarú JOÃO PESSOA RECIFE Porto de Suape PETROLINA Barreiras BA AL MACEIÓ Propriá Potential for 85 million annual tons SE (15.4 million ha) 1/4 of the Brazilian Agricultural Frontier Source: MRS Logística 21 21

22 ENERGY 22 22

23 Self-sufficiency in Energy Thermoelectric Power Plant CSN owns a thermoelectric power plant at Volta Redonda steel mill, which provides approximately 60% of its electrical energy needs. The plant processes steam and blown air from CSN s blast furnaces. Currently CSN is building a Top Recovery Turbine which will provide additional capacity of 17MW. Total CAPEX: US$ 30 million. Hydroelectric Power Plants CSN owns indirectly 29.5% of Itá hydroelectric facility, which has an installed capacity of 1,450 MW. Additionally, CSN owns 17.9% of a consortium that operates Igarapava hydroelectric facility with an installed capacity of 210 MW. CSN Total Capacity: 428 MW Average Utilized Capacity (%) 238 MW Thermoeletric Power Plant Concession Maturity* Renewable Itá Oct 2000 Oct 2030 Yes 167 MW 23 MW Itá Hydroelectric Power Plant Igarapava Hydro Power Plant Igarapava Dec 1998 Dec 2028 Yes * 30 years 23 23

24 FINANCIALS 24 24

25 Strong Revenue Growth Net Revenue by Business Segment Net Revenue by Market (BRL MM) (BRL MM) 16,520 16,520 10% 11,441 10% 6% 14,003 10% 15% 10,978 11% 17% 14,451 9% 24% 35% 11,441 28% 14,003 23% 10,978 26% 14,451 29% 37% 75% 84% 67% 72% 55% 72% 77% 74% 71% 63% Steel Mining Other Domestic Market Export 25 25

26 3,823 3,620 4,870 6,546 6,355 6,468 Performance 47% 42% 43% 44% 39% 33% 2006* 2007* 2008* 2009** 2010** 2011** *BRGAAP ** IFRS EBITDA (R$ MM) EBITDA Margin (%) 26 26

27 Adjusted EBITDA by Segment 2011 EBITDA by Segment Mining Adjusted EBITDA (R$ MM) 792 1,040 1, % 6.0% 0.3% Steel Adjusted EBITDA (R$ MM) Q11 2Q11 3Q11 4Q % 37.6% 1Q11 2Q11 3Q11 4Q11 Steel Mining Logistics Energy Cement 27 27

28 10,665 11,308 12,069 12,471 21,780 22,993 27,704 27,889 Indebtedness and Net Debt/Adjusted EBITDA Q11 2Q11 3Q11 4Q11 Total Debt (R$ MM) Net Debt (R$ MM) Net Debt/ Adjusted EBITDA * * Last 12 months 28 28

29 Visit our website: Investor Relations: (+55 11) / / invrel@csn.com.br 29 29