WebcastFourth Quarter 2004 Results

Presentation:Paulo Penido Pinto MarquesCFO and Investor Relations Director

Disclaimer

“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,

Brazil’s economic situation, the industry and international

markets, and are therefore subject to change.”

2

The Steel Industry - Brazil

• Brazilian crude steel production totaled 8.3 million tonnes in 4Q04 and 32.9 million in 2004, a growth of 5.7%.

• Domestic flat steel demand grew 13.7% and reached 10.5 million tonnes in the year.

• Reaction was driven initially by exporting companies and, from 2H04 onwards, by recovery in investment-stimulated and domestic consumer segments.

3

The Global Steel Industry

• World crude steel production: 9% growth in relation to 2003.

• Prices: historic highs during the year.

• Economic growth in main countries, highlighting North American and Chinese markets (high steel demand)

• Price increases in raw materials used in steel making.

4

Consolidated Results QoQ

5

R$ million 4Q 2004 4Q 2003 3Q 2004Chg.% 4Q/ 4Q

Total Sales Volume (000 t) 2,170 2,120 2,011 2

Net Revenues 3,809 2,442 3,285 56Net Income 1,127 359 1,005 214

EBITDA (a) 1,816 763 1,602 138EBITDA Margin 47.7% 31.3% 48.8%

Net Debt 3,495 6,744 4,975 -48Net Debt / EBITDA 0.6x 2.2x 1.1x

(a) Earnings before interest, depreciation, amortization and participations.

Highlights

Consolidated Results YoY

6

R$ million 2004 2003 Chg.%

Total Sales Volume (000 t) 8,062 7,710 5

Net Revenues 12,230 8,660 41Net Income 3,019 1,306 131

EBITDA (a) 5,624 3,072 83EBITDA Margin 46.0% 35.5%

Net Debt 3,495 6,744 -48Net Debt / EBITDA 0.6x 2.2x

(a) Earnings before interest, tax, depreciation, amortization and participations.

Highlights

• The System sold 2.2 million tonnes in 4Q04 and 8.1 million tonnes in 2004, 5% more than in 2003.

• Domestic sales totaled 5.8 million tonnes in 2004, 8% more than in 2003.

• Even with the entry of new players, the System ended 2004 with a 55% market share.

• Consolidated exports totaled 2.3 million tonnes in 2004, falling slightly by 4%.

Usiminas - Sales

7

69%78% 67% 67% 75% 65% 64% 73%

72%

72% 71%

Consolidated Sales (000 t.)

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

Domestic Market Export Market

25%

75%

1,8301,939

74%

26%

1,822

65%

35%

2,119

64%

36%

73%

28%

1,910

72%

72%

27%

1,9712,011

29%

71%

2,170

71%

29%

Usiminas – Sales Mix by Product

8

Sales Volume 2004

Hot Rolled

26%

Galvanized

8%

Slab

15%

Processed

Products

5%

Cold Rolled

25%

Heavy Plate

21%

Sales Volume 2003

Hot Rolled

27%

Galvanized

8%

Slab

15%

Processed

Products

5%

Cold Rolled

25%

Heavy Plate

20%

• The breakdown of sales by product remained stable, but with increased volume.

• Share of heavy plate increased to 21% in the product mix in 2004, as a consequence of strong demand and higher average prices than other steel products offered.

Usiminas – EBITDA

9

889

760

660

763

921

1.28

5

1.60

2

1.81

6

42%

33%31%

39%

46%

36%

49% 48%

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

EBITDA (R$ million) EBITDA Margin

• EBITDA reached R$ 1.8 billion in 4Q04, increasing 138%.

• For the year 2004, EBITDA rose 83% and passed the R$ 5.6 billion mark.

Usiminas – Consolidated Net Debt8,

1

7,4

7,4

6,7

6,3

6,1

5,0

3,5

2,7

2,2 2,22,0

1,7

2,2

1,1

0,6

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

CND (R$ billion) CND/ EBITDA

• In 2004, solid cash generation enabled the System to reduce debt by US$ 621 million.

• The Usiminas System ended the year with US$ 717 million in cash.

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Usiminas – Total Consolidated Debt4Q04: R$ 5.4 billion

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By Term

Long Term74%

Short Term26%

By Index

Swap CDI

33%

TJ LP

11%

US$

38%

IGP-M

6%Outros

12%

Foreign currency71%

Local currency29%

• The debt profile was extended. The percentage of long-term commitments increased from 63% in Dec 2003 to 74% in Dec 2004.

Usiminas – 4Q04 Consolidated Cash Flow(Brazilian Corporate Law) – R$ million

12

1,90219911160

288109

6191481,816

1,324

Initi

al B

alan

ce

EBITDA

New F

inan

cing

Amorti

zatio

n and F

inan

cing

Inte

rest

Work

ing C

apita

l Var

iatio

n

Inve

stm

ents

Divid

end / I

ntere

st o

n Cap

ital

Other

s

Final

Bal

ance

Stock Performance in 2004

• Valuation of Usiminas PNA (USIM5): 65.3% vs.17.8% Ibovespa index.

• Dividends and interest on capital totaled R$ 1.1 billion, i.e., a 35% dividend pay-out ratio and a 9.5% dividend yield.

• Usiminas has the third largest weight on the Ibovespa (4.78% of the Index).

• Company is preparing to list on Latibex.

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USIMINAS PNA X IBOVESPA IN 2004

12/3

0/20

03

1/30

/200

4

2/29

/200

4

3/30

/200

4

4/30

/200

4

5/30

/200

4

6/30

/200

4

7/30

/200

4

8/30

/200

4

9/30

/200

4

10/3

0/20

04

11/3

0/20

04

12/3

0/20

04

USIM5 +65%

IBOVESPA +18%

R$ 32.63

R$ 53.95

26,196

22,236

Investments (R$ million)

600

910

579

333475

2002 2003 2004 2005 2006

74%

72%New investment phase started in 2005-2006

Usiminas:

• New coke oven plant, which will make company self-sufficient in coke.

• 60MW thermoelectric power plant to increase self generation in Ipatinga

Cosipa:

• Top blowing blast furnace turbine in to increase self generation in Cubatão

• Revamping of continuous casting machine

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Outlook

• Brazilian economy tends to grow approx. 3.5% in 2005.

• Brazilian flat steel market should grow by 9% in 2005, according to the IBS.

• No substantial international price reductions are foreseen in the medium term in function of heated demand and raw materials increases.

• Consequence of this scenario: solid cash generation seen in last quarters should continue.

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Goals of the Usiminas System in 2005

• Maintenance of product sales at 8 million tonne level.

• Domestic market continues a priority = 75% of sales, investing in stability of commercial relations and maintenance of business profitability.

• Market share maintenance, with position of leadership in flat rolled steel market.

• Priority of funds generation given to investment program, maintenance of dividend policy and continuity of debt repayment.

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For Additional Information:Usiminas Investor Relations

Luciana Valadares dos Santoslsantos@usiminas.com.brTel: (+55 31) 3499-8619

Douglas Lee Arnolddarnold@usiminas.com.brTel: (+55 31) 3499-8856

Matheus Perdigão Rosamprosa@usiminas.com.brTel: (+55 31) 3499-8056

COSIPA - Gilson Rodrigues Bentesgilson@cosipa.com.brTel: (+55 11) 5070-8980

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Bruno Seno Fusarobrunofusaro@usiminas.com.brTel: (+55 31) 3499-8710

www.usiminas.com.br