CORPORATE PRESENTATION
September 2012
Timeline
1996/2002 CSN invested US$2.4 Billion in technological advances 2005 Casa de Pedra and Itaguaí Terminalexpansions begin 2007 First iron ore export shipment 1993
CSN
privatization
1974/1989 3 Expansions in Volta Redonda Steel Mill 1946 Operational start-up 1941 CSN is founded 2008 Sale of 40% of NAMISACSN – Share Ownership – June 30, 2012
25.5%
19.8%
1.9%
47.9%
4.0% 0.9%
Bovespa
BNDESPAR
VICUNHA
RIO IACO
CBS
ADRs
2009 Cement plant Start - Up 2012 Acquisition of SWTCompetitive 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;
CSN - Key Business Areas
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 2011
55% 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 # 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 2009.
Uses CSN's blast
furnaces by-products 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 container terminals in Brazil. Apart from containers, TECON also handles CSN’s steel products and general cargo.
CSN is self-sufficient in energy production. Total energy capacity available: 428 MW (average).
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.
RJ
MG
Brazil
Itaguaí Port
60 milesIron ore & Coal Terminal and Container Terminal (controled by CSN)
Lime & Dolomite mine
(Arcos)
260 miles
Iron Ore mines
(Casa de Pedra & NAMISA)
200 miles
Rio de Janeiro Port 80 miles
São Paulo
(Brazilian largest market) 270 miles
MRS railway
(equity of 33%)Volta Redonda
Steel Facility
Rio de Janeiro MRS FCA Angra PortCSN, an Integrated Company
Steel Figures
Source: IABr 0.75 1.00 1.51 2.26 2.23 5.39 3.78 2005 2006 2007 2008 2009 2010 2011Brazil's Imports of Steel (Mt)
16.7 16.5 16.0 18.3 16.8 18.5 22.1 24.0 18.6 26.1 25.1 9.7 9.5 9.8 11.0 10.2 11.1 13.4 13.9 10.7 15.3 14.7 7.0 7.0 6.1 7.3 6.6 7.4 8.7 10.1 7.8 10.8 10.4 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Apparent Consumption of Steel Products in Brazil (Mt)
Total Steel Products Flat Products Long Products
1.00
0.97
1Q12 2Q12
Brazil's Imports of Steel (Mt) - 2012
6 .0 6.4 3 .4 3.4 2 .7 3.0 0,0 1Q12 2Q12
Apparent Consumption of Steel Products Brazil (Mt) - 2012
Import Parity - Different FX Scenarios
Hot Rolled Sheet Import Parity (USD/t)
FOB Price
540
540
540
Ocean Freight
45
45
45
Insurance
2
2
2
CIF Price
587
587
587
Import Tax
147
147
147
FMM Tax
11
11
11
Port Expenses
24
24
24
Other Costs
15
15
15
All-in price of imported Steel
784
784
784
Hot Rolled Price in Brazil (R$)
Commodity Grade without Extras
1,500
1,500
1,500
FX
1.95
2.00
2.05
Domestic Price in USD
769
750
732
Construction/Infrastructure
Steel – Sales Volume and Net Revenues
Sales Volume
Net Revenues
(BRL MM)
Exports
(t)
Sales by Products – 1H12
Sales by Segment – 1H12
(t)
Tin Plate Galvanized Cold Rolled
13%
9%
22%
Automotive
Distribution Home Appliance/OEM Steel Packaging
10%
26%
15%
36%
15%
41%
(Thousand t)Domestic Market Overseas Subsidiaries
2009 4,110 3,243 413 454 2008 4,891 4,157 497 237 2010 177 484 4,796 4,135 2011 183 497 4,896 4,216 1Q12 1,322 1,035 260 27 2008 10,566 2009 8,201 2010 9,926 9,478 2011 1Q12 2,399
13%
Steel Profiles Hot Rolled 2Q12 1,412 1,040 327 45 2Q12 2,652
CSN is currently constructing its first long steel plant in Volta Redonda;
Production capacity of 500,000 tons/year of long steel;
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$0.9 billion
of which was already invested), including expansion and acquisition of an electric furnace.
* In 2Q12, SWT’s results were fully consolidated, whereas in 1Q12 consolidation was proportional to the 2 months of operation following its
acquisition on 31/01/2012
SWT – Key Figures
158
241
142
220
10.8%
9.4%
0 3.000 6.000 9.000 12.000 15.000 18.000 21.000 24.000 27.000 30.000 33.000 36.000 39.000 42.000 45.000 48.000 51.000 54.000 57.000 60.000 63.000 66.000 69.000 72.000 75.000 78.000 81.000 84.000 87.000 90.000 93.000 96.000 99.000 102.000 105.000 108.000 111.000 114.000 117.000 120.000 123.000 126.000 129.000 132.000 135.000 138.000 141.000 144.000 147.000 150.000 153.000 156.000 159.000 162.000 165.000 168.000 171.000 174.000 177.000 180.000 183.000 186.000 189.000 192.000 195.000 198.000 201.000 204.000 207.000 210.000 213.000 216.000 219.000 222.000 225.000 228.000 231.000 234.000 237.000 240.000 243.000 246.000 249.000 252.000 255.000 258.000 261.000 264.000 267.000 270.000 273.000 276.000 279.000 282.000 285.000 288.000 291.000 294.000 297.000 300.000 303.000 306.000 309.000 312.000 315.000 318.000 321.000 324.000 327.000 330.000 333.000 336.000 339.000 342.000 345.000 348.0001Q12*
2Q12
Production, Sales & EBITDA Margin
World Mining Figures
Iron Ore – Sales Volume and Net Revenues
(2) Net revenues are consolidated, considering 60% of NAMISA sales since Dec/08, given the acquisition of 40% of NAMISA by the Asian Consortium.
2008
2,085
Exports Destination
(3)– 1H12
Domestic Market Exports(1) Total sales volume reflects 100% of NAMISA sales.
(t)
Sales by Products
(3)– 1H12
(t)5%
13%
7%
75%
20091,964
20103,615
25.3
200821%
79%
18.5
20093%
97%
22.4
20106%
94%
20115,942
Sales Volume
(1)Net Revenues
(2)(BRL MM) (Million t)
29.3
20115%
95%
27%
22%
14%
16%
1Q1297%
6.7
3%
1Q121,194
2Q1297%
6.1
3%
2Q121,143
NAMISA (60% ownership)
Current capacity: 6.8 mtpy
Future capacity: 33 mtpy
Acquisition from third-parties: 6.0 mtpy
Future sales: 39 mtpy
Casa de Pedra Mine
Current capacity : 21 mtpy
CSN Consumption: 7 mtpy
Future capacity: 50 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
84 mtpy and coal and coke unloading capacity of 8.5 mtpy Railway MRS (33.27% ownership)
Mining
CSN – Itaguaí Port
Volta Redonda
Steel Mill
Cosigua São Paulo Rio de Janeiro CST VitóriaSteel Railway - MRS
CSN Casa de Pedra
Namisa/ Engenho
Namisa/ Sarzedo
Gerdau - AçominasNamisa/
Fernandinho
Santosz
Cosipa Belo Horizonte Atlantic Ocean VALE’S MINES LOADING TERMINALS CITIES STEEL MILLS CSN/ NAMISA FacilitiesIron Ore Project Expansion
Nova Lima Acesita Usiminas MRS EFVM
1,380 1,023 976 645 643 485 350 311 223 178
China Vietnam South Korea
Turkey Egypt World Russia Brazil USA India
Consumption Per Capita*
Cement Figures
39,710 38,912 38,873 34,884 35,734 37,666 41,027 45,062 51,571 51,892 60,008 64,692 232 224 220 195 197 205 221 240 272 271 311 332 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Apparent Consumption in Brazil
Kt Per Capita (kg/inhabitant)
CSN began producing and selling cement in May/09;
The Company takes advantage of the limestone reserves
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
grinding capacity to 5.4 mtpy;
Target clinker capacity expansion is 3.0 mtpy, from a
current capacity of 0.8 mtpy;
Until June 2012, R$0.8 billion was already invested.
338
2009
Sales Volume
(Thousand t)992
2010
Net Revenues
(R$ MM)202
60
333
Cement Figures
1,755
2011
466
1Q12
87
456
2Q12
93
Logistics – Railways and Port
Nova Transnordestina
CSN owns 74% of the total share capital (in
June 2012)
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
Locomotives: 100 (current)
Cars: 1,700 (current)
Legend
Existing Railway “Nova Transnordestina” Railway in process of remodeling
SÃO LUÍS TERESINA NATAL RECIFE Porto de Pecém Crato MISSÃO VELHA Caruarú PA MA PI CE RN PB PE CRATEÚS Sobral Porto de Suape FORTALEZA ARARIPINA PETROLINA C.Grande SALGUEIRO PIQUET CARNEIRO PARNAMIRIM Uruçuí Ribeiro Gonçalves Balsas Jucurutú Limoeiro do Norte PA Eliseu Martins JOÃO PESSOA Legend Existing Railway “Nova Transnordestina” Railway in process of remodeling
SÃO LUÍS TERESINA NATAL RECIFE Porto de Pecém Crato MISSÃO VELHA Caruarú PA MA PI CE RN PB PE CRATEÚS Sobral Porto de Suape FORTALEZA ARARIPINA PETROLINA C.Grande SALGUEIRO PIQUET CARNEIRO PARNAMIRIM Uruçuí Ribeiro Gonçalves Balsas Jucurutú Limoeiro do Norte PA Eliseu Martins JOÃO PESSOA SÃO LUÍS TERESINA NATAL RECIFE Porto de Pecém Crato MISSÃO VELHA Caruarú PA MA PI CE RN PB PE CRATEÚS Sobral Porto de Suape FORTALEZA ARARIPINA PETROLINA C.Grande SALGUEIRO PIQUET CARNEIRO PARNAMIRIM Uruçuí Ribeiro Gonçalves Balsas Jucurutú Limoeiro do Norte PA Eliseu Martins JOÃO PESSOA
Itaguaí Port
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).
MRS Railway
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, Usiminas and Gerdau
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: 152.4 mt in 2011 Concession: November 1996
Concession Maturity: October 2026 (30 years
renewable)
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
Thermoeletric Power Plant Itá Hydroelectric Power Plant 238 MW 167 MWAverage Utilized Capacity (%)
Concession Maturity* Renewable
Itá Oct 2000 Oct 2030 Yes
Igarapava Dec 1998 Dec 2028 Yes
