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Webcast Fourth Quarter 2004 Results

Webcast Fourth Quarter 2004 Results. Presentation: Paulo Penido Pinto Marques CFO and Investor Relations Director. Disclaimer.

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Webcast Fourth Quarter 2004 Results

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  1. Webcast Fourth Quarter 2004 Results Presentation: Paulo Penido Pinto Marques CFO and Investor Relations Director

  2. 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

  3. 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. The Steel Industry - Brazil 3

  4. 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. The Global Steel Industry 4

  5. Consolidated Results QoQ 5

  6. Consolidated Results YoY 6

  7. Usiminas - Sales 72% • 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%. 67% 64% 73% 71% 67% 75% 65% 72% 69% 78% 7

  8. Usiminas – Sales Mix by Product • 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. 8

  9. Usiminas – EBITDA • 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. 9

  10. Usiminas – Consolidated Net Debt • 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. 10

  11. Usiminas – Total Consolidated Debt4Q04: R$ 5.4 billion • The debt profile was extended. The percentage of long-term commitments increased from 63% in Dec 2003 to 74% in Dec 2004. 11

  12. Usiminas – 4Q04 Consolidated Cash Flow(Brazilian Corporate Law) – R$ million 12

  13. 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. 13

  14. Investments (R$ million) • 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 14

  15. 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. Outlook 15

  16. 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. Goals of the Usiminas System in 2005 16

  17. For Additional Information:Usiminas Investor Relations www.usiminas.com.br 17

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