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Classification of Information
Grupo de Acesso:
1Q18 Presentation
Public
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
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
2015
Temporary
shutdown
of the
primary
areas in
Cubatão
2016
•R$ 1 billion
capital
increase
•Debt
Renegotiation
2017
R$ 1 billion
Mineração
Usiminas’
capital
reduction
2018
BF #1 Relight in Ipatinga (Shutted
down in Jun. 2015)
Timeline
Control Group:
68,57% of Voting Capital
Total Capital
1,253,079,108
Voting Capital Preferred
ON 56.28% 705,260,684 PN 43.72% 547,818,424
Shareholding Composition
5
Usiminas shares are traded on B3 (São Paulo), on the OTC Market (New York) and on a LATIBEX exchange
section (Madrid).
Nippon Group
0.57%
Others
97.64%
Ternium/Tenaris Group 1.79%
Controllers Agreement
Nippon Group
31.45%
Usiminas Pension
Fund
4.84%
Others
23.19%
Nippon Group
0.95%
Ternium/Tenaris Group 7,29%
Ternium/Tenaris
Group
32,28%
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$260 million,
encouraging around 2,000 social projects First educational institution in Brazil
to obtain ISO 9001
São Francisco Xavier School
Márcio Cunha Hospital
Reference center in healthcare all over Brazil
Xerimbabo Usiminas Project Promotes protection and environmental education
free of charge for more than 2 million young people
11,62 10,55
12,30
4,02
8,26
10,83 12,31
10,12 10,52
5,05
1,55
4,10
9,10
10,92
2012 2013 2014 2015 2016 2017 1T18
USIM3 USIM5
Note: The prices are adjusted by removing the effects of events such as Bonus and Unfolding
9
Shares’ Quotation on B3 R$/share - Up to 03/31/2018
Agenda
Usiminas and its
business units
Market
Outlook
Financial
Results
Usiminas Profile
10
24,1
34,4
37,5
43,3
71,1
71,3
81,6
101,4
104,7
831,7
Italy
Brazil
Turkey
Germany
South Korea
Russia
USA
India
Japan
China
World Crude Steel Market in 2017
Million Tons
Source: World Steel Association/OECD
11
Nominal
Capacity
2,351
Production
1,690
Excess of Capacity 661
36%
22%
16%
10%
4%
2% 1%
9%
China
Asia and Oceania
European Union
North America
South America
Europe (others)
Africa
Others
49%
22%
10%
7%
3% 3%
1% 6%
World Crude Steel Production
1,348 million tons 1,690 million tons
12 Source: World Steel Association
2017 2007
*Except China
+25%
Brazilian Flat Steel Market
13
Million Tons
Source: Instituto Aço Brasil / Usiminas – Excludes Slabs
14,3
11,9
15,2 14,3
14,9 15,0 14,2
13,4
12,3
13,7 13,1
10,2
14,5 13,7
14,3 14,7
13,2
10,6
9,3
10,4
7%
11%
22%
14% 13% 12%
15% 15%
8%
13%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Production Consumption Imports
2.141 2.209 2.347 2.351 2.330
311 302
393 308 317 2.141 2.209
2.347 2.351 2.330
1Q17 2Q17 3Q17 4Q17 1Q18
Sales of the Plants Imports Total Source: Usiminas – Commercial Planning 14
+2,9%
-0,9%
Brazilian Flat Steel Apparent Consumption Evolution
Quarterly - Thousand Tons
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
15
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
16
825 840 882 894 919
105 150
134 196 170
930 990 1.016
1.090 1.089
1Q17 2Q17 3Q17 4Q17 1Q18
Exports Domestic Market
17
Vendas de Aço – Siderurgia - Trimestral
+3%
-14%
SALES VOLUME- STEEL
Steel Business Unit – Quarterly - Thousand Tons
37%
27%
6%
5%
5%
4%
4% 3%
2%
1% 6%
1Q18
28%
31% 5%
3%
13%
1%
1% 1% 5%
10% 2%
4Q17
Argentina
Germany
Belgium
Mexico
United Kingdom
Switzerland
Italy
Colombia
Portugal
Spain
Luxembourg
Others
18
Europe: 49% Europe: 66%
Exports – Main Markets
%
36%
14% 13%
8%
7%
6%
5%
3%
9%
1Q18
Steel Business Unit
19
Cost of Goods Sold - COGS
35%
15%
13%
9%
8%
6%
5%
3% -4%
10%
4Q17
Other Raw Materials
Labor (direct and indirect)
Coal and Coke
Energy and Fuels
Iron Ore and Pellets
Spare Parts
Depreciation
Structural Expenses
Inventories Variation
Others
20
EBITDA AND EBITDA MARGIN
465 498 438 405
569
21% 20%
17%
15%
19%
1Q17 2Q17 3Q17 4Q17 1Q18
Reported EBITDA Reported 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
Total Hot Rolled Cold Rolled Heavy Plates Electrogalvanized HDG
2,200 Total production capacity of
products for sale 4,200 1,900 1,020 350
Galvanized
Theoretical nominal capacity * of production and sale
22
* According to the theoretical mix of sales in the implementation of the line;
** Excluding the temporarily suspended capacities of Heavy Plates and Hot Strip Laminator #1 in Cubatão.
2,200 2,070 900 900 350 Generation of products for sale
with the equipment in operation **
9,670
6,620
Crude steel capacity of 9.5 million tons, being 5 million tons in Ipatinga and 4.5 million in Cubatão, which had the operation of its
primary areas temporarily suspended and currently processes acquired plates.
Thousand Tons
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)
23
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
24
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
25
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
26
Mining Business Unit
Production Capacity
Lump 2 million
Sinter Feed
4 million
Pellet Feed
6 million
70%
30%
Shareholder Composition
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
27
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
28
Investments
Mining Business Unit
615 596 676
605 555
28 33
53 179 167
175
716
1.084
643 629
904
1.500
1.806
1Q17 2Q17 3Q17 4Q17 1Q18
Sales to Usiminas Sales to 3rd parties - Domestic Market Exports Total29
+20%
IRON ORE SALES Mining Business Unit – Quarterly - Thousand Tons
30
Iron Ore Price – PLATTS (62% Fe CFR China)
US$/ton
86
63 71
66 74
1Q17 2Q17 3Q17 4Q17 1Q18
Iron Ore Price - US$/t CFR China
EBITDA AND EBITDA MARGIN
31
52
226
27 41 49
48%
253%
22% 20% 19%
1Q17 2Q17 3Q17 4Q17 1Q18
Reported EBITDA Reported EBITDA Margin
*Extraordinary effect of R$ 201 milhões from Porto Sudeste’s agreement
*
Mining Business Unit – Quarterly - R$ million
o 6 industrial units in different Brazilian states:
MG, SP, RS, ES and PE
o Processing capacity of 2 million tons of
steel/year
o Net Revenue of R$2.5 billion in 2017
Description
Soluções Usiminas - Steel Processing
32
Porto Alegre
Guarulhos
Taubaté
Suape
Betim
Santa Luzia
33
37
27
18 19
29
7%
5%
3% 3%
4%
1Q17 2Q17 3Q17 4Q17 1Q18
Reported EBITDA Reported EBITDA Margin
EBITDA AND EBITDA MARGIN
Steel Transformation - Soluções USIMINAS – Quarterly - R$ Million
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$288 million in 2017
Usiminas Mecânica - Capital Goods
Description
Brasília 3rd Bridge
34
Steel Structures
35
EBITDA AND EBITDA MARGIN
(4) (2)
(25)
(2)
33
-5%
-2%
-35%
-4%
29%
1Q17 2Q17 3Q17 4Q17 1Q18
Reported EBITDA Reported EBITDA Margin
*
*Extraordinary effect of R$ 22 million negative related to Regularize Program adherence.
Capital Goods – USIMINAS Mecânica – Quarterly - R$ Million
Agenda
Usiminas and its
business units
Market
Data
Financial
Results
Usiminas
Profile
36
37
EBITDA AND EBITDA MARGIN
533
750
453 450
641
23%
29%
17%
15%
20%
1Q17 2Q17 3Q17 4Q17 1Q18Reported EBITDA Reported EBITDA Margin
* **
*Extraordinary effect of R$ 201 million from Porto Sudeste’s agreement
**Extraordinary effect of R$ 40 million negative related to Regularize Program participation.
Consolidated– Quarterly - R$ Million
1.260
11 77
331
610
877 875 875 874
107
303
15
77
144
208 208 208 208
26
1.563
11 92
408
754
1.086 1.083 1.083 1.083
133
Cash 2018 2019 2020 2021 2022 2023 2024 2025 2026
Local Currency Foreign Currency
Duration: R$: 50 months US$: 56 months
38
Consolidated – R$ millions
Debt Profile (Principal)
CASH POSTION AND INDEBTEDNESS (WITH INTEREST MONEY)
Duration : R$: 50 months US$: 56 months
39
Consolidated – R$ millions
2.416 1.951 2.138 2.314
1.563
4.464 4.998 4.722 4.342
4.117
6.879 6.950 6.860 6.656
5.680
1Q17 2Q17 3Q17 4Q17 1Q18
Net Debt Cash Gross Debt
40
CAPEX Consolidated – R$ millions
18 25
42
90
56
2
2
1
5
1
1
2
3
4
4
3
5
5
9
4
23
34
52
107
65
1Q17 2Q17 3Q17 4Q17 1Q18
Steel Capital Goods Steel Transformation Mining Total
41
93 97
106 109 103
4,0% 3,8%
3,9%
3,5%
3,2%
1Q17 2Q17 3Q17 4Q17 1Q18
G&A G&A/Net Revenues
G&A EVOLUTION - CONSOLIDATED
R$ million
2,6
3,1 3,1
2,8 3,0
1Q17 2Q17 3Q17 4Q17 1Q18
Working Capital42
Consolidated – R$ billions
WORKING CAPITAL
+5.6 %
648 620
599
554 566
1Q17 2Q17 3Q17 4Q17 1Q18
Inventory turnover (days)
63 56 54 47 47
43
WORKING CAPITAL: STEEL INVENTORIES
Thousand tons
481
382 358
414
612
185
367
107
71
324
108
176
76
(45)
157
1Q17 2Q17 3Q17 4Q17 1Q18
Gross Profit EBIT Net Income44
USD/BRL 3.168 3.308 3.168 3.308 3.324 END OF PERIOD
Gross Profit, EBIT and Net Income
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
1Q18 4Q17 1Q18 4Q17 1Q18 4Q17 1Q18 4Q17 1Q18 4Q17 1Q18 4Q17
Net Revenue 252 206 3,003 2,761 703 667 113 51 (827) (608) 3,244 3,077
Domestic Market 77 61 2,580 2,329 703 667 113 51 (827) (608) 2,646 2,500
Exports 175 145 423 432 - - - - - - 598 577
COGS (179) (154) (2,460) (2,371) (656) (629) (74) (54) 737 545 (2,632) (2,662)
Gross Profit (Loss) 73 52 543 390 47 38 39 (4) (90) (62) 612 415
Operating Income (Expenses) (56) (48) (196) (267) (26) (28) (12) (3) 2 2 (288) (344)
Selling (25) (18) (37) (36) (10) (11) (3) (4) (1) (1) (76) (70)
General and Administrative (6) (3) (78) (86) (13) (14) (9) (8) 3 3 (103) (108)
Others, Net (25) (27) (81) (145) (3) (2) - 8 - - (109) (166)
EBIT 17 4 347 123 21 11 27 (7) (88) (60) 324 71
Adjusted EBITDA 49 42 568 404 29 19 32 (2) (37) (12) 641 451
Adj.EBITDA Margin 19% 20% 19% 15% 4% 3% 29% -4% 5% 2% 20% 15%
*Consolidated 70% of Unigal
AdjustmentCapital GoodsSteel
ProcessingSteel*Mining Consolidated
Income Statement per Business Units - Non Audited - Quarterly
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 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.
www.usiminas.com/ri
ADR
Nível I
Leonardo Karam Rosa IR Manager
[email protected] Tel: 55 31 3499-8550
Danielle Ap. Maia IR Analyst
[email protected] Tel: 55 31 3499-8550
Investors Relations