Release 1Q15
Transcription
Release 1Q15
Public Disclosure - Belo Horizonte April 23, 2015. Usinas Siderúrgicas de Minas Gerais S.A. - Usiminas (BM&FBOVESPA: USIM3, USIM5 e USIM6; OTC: USDMY and USNZY; Latibex: XUSIO and XUSI) today releases its first quarter (1Q15) results. Operational and financial information of the Company, except where otherwise stated, are presented based on consolidated figures, in Brazilian Real, according to International Financial Reporting Standards (IFRS). All comparisons made in this release take into consideration the fourth quarter of 2014 (4Q14), except where stated otherwise. Release of the 1Q15 results The main operational and financial indicators were: Steel sales volume of 1.3 million tons; Iron ore sales volume of 1.1 million tons; Consolidated Adjusted EBITDA of R$379.5 million and Adjusted EBITDA Margin of 14%; Working Capital on 03/31/15 of R$2.7 billion; Investments of R$232.3 million. Main Highlights 1Q15 4Q14 1Q14 Steel Sales Volume (000 t) Iron Ore Sales Volume (000 t) Net Revenue COGS Gross Profit (Loss) Net Income (Loss) EBITDA (Instruction CVM 527) EBITDA Margin (Instruction CVM 527) 1,256 1,139 2,680 (2,437) 244 (235) 354 13% 1,247 1,161 2,585 (2,527) 58 (117) 291 11% 1,437 1,765 3,142 (2,623) 520 222 648 21% Chg. 1Q15/4Q14 1% -2% 4% -4% 319% 101% 22% + 200 bps Adjusted EBITDA Adjusted EBITDA Margin Investments (CAPEX) Cash Position 380 14% 232 2,621 302 12% 343 2,852 655 21% 238 2,914 26% + 200 bps -32% -8% R$ million - Consolidated Index Market Data - 03/31/15 BM&FBOVESPA: USIM5 R$ 4,97/share USIM3 R$21,50/share EUA/OTC: USNZY US$1,58/ADR LATIBEX: XUSI €1,48/share XUSIO €6,27/share 1Q15 Results • Consolidated Results • Performance of the Business Units: - Mining - Steel - Steel Processing - Capital Goods • Subsequent Events and Consolidated Highlights • Capital Markets • Balance Sheet, Income and Cash Flow Statements 1 Economic Scenario The global economy is still growing at a moderate pace. The International Monetary Fund - IMF expects a slight growth acceleration from 3.4% in 2014 to 3.5% in 2015, but with substantial rhythm differences between advanced economies and emerging economies, whose potential growth has proved to be lower. In Latin America, the major economies have shown mixed performance in early 2015. The decrease in the commodity prices has negatively impacted the performance of several economies in that region and the more depreciated exchange rate - pressuring inflation - has reduced the chance of stimulus, limiting these countries’ recovery. The economy activity in Brazil has still being in a weak performance. The Brazilian Central Bank’s economic activity index - IBC-Br, available for the first two months of the year, has signaled a decrease in GDP for the 1Q15. The scenario of high interest rates, inflation and job market deterioration are some of the factors that have contributed to the worsening of the economic environment, resulting in a decline in the growth expectations for 2015, which was 0.2% at the beginning of the year, moving to -1.0% at the end of the first quarter. In the Brazilian industry, the scenario is even more challenging. The Industrial Production in February recorded the 12th consecutive month of retraction and declined 9.1%, if compared with February 2014, the highest decline since 2009. The accumulated figures in the year, up to February, represented a retraction of 7.1%. Considering high inventories and confidence indexes at minimum levels, there are no signs of an imminent recovery. Steel intensive industrial segments also had significant downfalls in the period. In the first two months of the year, the capital goods production receded 21.1% and the durable goods, 20.1%. 1Q15 Results 2 Economic and Financial Performance Comments on Consolidated Results Net Revenue Net revenue in the 1Q15 was R$2.7 billion, representing a growth of 3.7% against the R$2.6 billion in the 4Q14, due to higher steel sales volume in the domestic market by 10.0%. Net Revenue Breakdown 1Q15 4Q14 1Q14 Domestic Market 88% 84% 87% Exports 12% 16% 13% Total 100% 100% 100% Cost of Goods Sold (COGS) In the 1Q15, COGS totaled R$2.4 billion, against R$2.5 billion in the 4Q14, and gross margin was 9.1%, against 2.2% in the 4Q14, an increase of 690 basis points, as per the chart below: Gross Margin 1Q15 4Q14 1Q15 9.1% 2.2% 16.5% Operating Expense and Income In the 1Q15, sales expenses were R$51.2 million, against R$72.2 million in the 4Q14, a reduction of 29.2%, mainly due to lower distribution cost and to lower provisions for doubtful accounts. General and administrative expenses in the 1Q15 totaled R$122.5 million, against R$134.2 million, a decline of 8.8%, mainly due to reduction in expenses related to direct labor and third parties’ services by 9.4%. Other operating expenses and income resulted in an expense of R$34.5 million in the 1Q15, against an income of R$105.3 million in the 4Q14, mainly in function of lower sale revenue of surplus electric energy, which totaled R$27.9 million in the 1Q15, against R$90.4 million in the 4Q14, of higher provision for contingencies in R$27.5 million in the 1Q15 and of asset sales in the amount of R$32.1 million in the 4Q14. Thus, net operating expenses totaled R$208.1 million in the 1Q15, against R$101.1 million in the 4Q14. In this manner, the Company’s operating margin is presented below: EBIT Margin 1Q15 Results 1Q15 4Q14 1Q14 1.3% -1.7% 10.7% 3 Adjusted EBITDA Adjusted EBITDA is calculated from net income (loss), reversing profit (loss) from discontinued operations, income tax and social contribution, financial result, depreciation, amortization and depletion, and equity in the results of Associate, Joint Subsidiary and Subsidiary Companies. The adjusted EBITDA includes the proportional participation of 70% of Unigal and others joint subsidiary companies. EBITDA Breakdown Consolidated (R$ thousand) 1Q15 Net Income (Loss) 4Q14 1Q14 (235,380) (117,330) 221,628 Income Tax / Social Contribution (78,071) (95,263) 141,087 Financial Result 360,900 213,761 18,057 Depreciation, Amortization 306,430 289,773 267,088 353,879 290,941 647,860 EBITDA - Instruction CVM - 527 Equity in the Results of Associate and Subsidiary Companies (11,971) (44,147) (44,284) Joint Subsidiary Companies proportional EBITDA 37,626 55,002 51,809 379,534 301,796 655,385 Adjusted EBITDA Adjusted EBITDA in the 1Q15 reached R$379.5 million, against R$301.8 million in the 4Q14, 25.8% higher, comparing both periods, mainly due to the better performance of the Steel Unit, even with lower sale revenue of surplus electric energy in R$62.6 million. Adjusted EBITDA Margin in the 1Q15 was 14.2%, against 11.7% in the 4Q14. Adjusted EBITDA margins are shown below: Adjusted EBITDA Margin 1Q15 4Q14 1Q14 14.2% 11.7% 20.9% Financial Result In the 1Q15, net financial expenses were R$360.9 million, against R$213.8 million in the 4Q14, an increase of R$147.1 million, mainly attributed to higher currency exchange losses in R$255.0 million due to the strong Real depreciation against the Dollar of 20.8% in this quarter. This was partially compensated by lower financial expenses in R$65.0 million in function of lower interest expenses on loans and by higher SWAP operations market cap in R$67.1 million. Financial Result - Consolidated 1Q15 4Q14 1Q14 Chg. 1Q15/4Q14 Currency Exchange Variation (390,815) (135,818) 64,830 188% Swap Operations Market Cap. 93,983 26,912 (959) 249% (61,212) (35,097) (44,148) 74% 52,539 50,559 39,052 4% (55,395) (120,317) (76,832) -54% (360,900) (213,761) (18,057) 69% R$ thousand Inflationary Variation Financial Income Financial Expenses FINANCIAL RESULT 1Q15 Results 4 Equity in the Results of Associate and Subsidiary Companies In the 1Q15, equity in the results of associate and subsidiary companies was R$12.0 million, against R$44.1 million in the 4Q14, a decrease of R$32.2 million, mainly due to lower contribution of Unigal in the period, which was mainly affected by the increase in the financial expenses on loans in Dollar due to the strong exchange rate devaluation in the period. Net Profit (Loss) In the 1Q15, the company accounted a net loss of R$235.4 million, higher than the net loss recorded in the 4Q14 of R$117.3 million. Although all of the Business Units improved their operational performance, the strong foreign exchange depreciation by 20.8% in the quarter increased the financial expenses, affecting the Company’s results. Working Capital At the end of the 1Q15, the Company’s working capital was R$2.7 billion, against R$2.4 billion in the 4Q14, representing a 12.9% increase, mainly in function of the increase in the accounts receivable in R$133.6 million and the increase in the inventories of finished products and raw materials in R$393.7 million, partially compensated by the increase in the accounts payable in R$286.4 million. Investments (CAPEX) In the 1Q15, CAPEX totaled R$232.3 million, 32.3% lower when compared with the 4Q14, which was R$343.1 million. The main investments were with sustaining CAPEX and technology updating of the plants. Out of total investments, approximately 85% was applied to the Steel Unit, 11% to the Mining Unit, 3% to the Steel Transformation Unit and 1% to the Capital Goods Unit. Indebtedness Consolidated gross debt was R$7.1 billion on 03/31/15, against R$6.7 billion on 12/31/14, representing an increase of 6.7%, mainly due to the Real depreciation against the Dollar of 20.8%, which directly impacted the debt portion denominated in Dollar, which accountted for 40.0% of the total debt. Debt composition by maturity was 24% in the short term and 76% in the long term. The net debt/EBITDA ratio on 03/31/15 was 2.9 times. The chart below demonstrates consolidated debt by index: Total Indebtedness by Index - Consolidated R$ thousand Local Currency 31-Mar-15 Short Term Long Term TOTAL % TOTAL Change Mar15/Dec14 31-Mar-14 TOTAL Change Mar15/Mar14 1,159,719 3,126,634 4,286,353 4,265,226 0% 4,500,164 -5% TJLP 188,293 375,470 563,763 - 618,078 -9% 807,936 -30% CDI 943,915 2,699,106 3,643,021 - 3,573,921 2% 3,589,301 27,511 52,058 79,569 - 73,227 9% 102,927 -23% 571,372 2,291,058 2,862,430 40% 2,436,521 17% 2,157,597 33% 1,731,091 5,417,692 7,148,783 100% 6,701,747 7% 6,657,761 7% Others Foreign Currency (*) Gross Debt 60% 31-Dec-14 1% Cash and Cash Equivalents - - 2,621,043 - 2,851,903 -8% 2,913,979 -10% Net Debt - - 4,527,740 - 3,849,844 18% 3,743,782 21% (*) 99% of total foreign currency is US dollars denominated 1Q15 Results 5 The graph below shows the consolidated debt profile and cash position in R$ million on 03/31/15: Duration: R$ : 31 monthes US$:29 monthes 2,621 1,256 1,723 1,599 1,531 1,357 523 605 330 821 1,333 68 1,365 1,027 1,076 926 118 753 390 3 114 Cash 2015 2016 2017 2018 Local Currency 2019 2020 on Foreign Currency Performance of the Business Units Intercompany transactions are on an arm’s-length basis (market prices and conditions). Usiminas - Unidades de Negócios Mineração Transformação do Aço Siderurgia Mineração Usiminas Usina de Ipatinga Usina de Cubatão Unigal Bens de Capital Soluções Usiminas Usiminas Mecânica Income Statement per Business Units - Non Audited - Quarterly R$ million Mining 1Q15 Net Revenue Steel Processing Steel* 4Q14 1Q15 4Q14 1Q15 Capital Goods 4Q14 1Q15 4Q14 Adjustment 1Q15 Consolidated 4Q14 1Q15 4Q14 118 87 2,556 2,457 540 574 211 190 (744) (723) 2,680 2,585 Domestic Market 118 87 2,230 2,033 536 573 211 190 (744) (723) 2,350 2,160 Exports - 327 424 4 1 (2,316) (2,364) (527) (573) COGS - (111) Gross Profit (Loss) Operating Income (Expenses) 6 (100) (12) (15) (4) EBIT (9) (16) Adjusted EBITDA 43 24 Adj.EBITDA Margin 36% 27% (185) (176) 241 93 13 (152) (66) (24) (17) 88 27 (11) (16) 8 (2) 337 268 (4) (6) 14 5 13% 11% -1% 1 - -1% 26 14 (18) (16) 7% 2% - - 331 425 702 685 (2,437) (2,527) (42) (38) 1 2 (41) (208) (36) (11) - 244 35 11 380 - 14% *Consolidates 70% of Unigal 1Q15 Results 6 58 (101) (43) 302 12% I) M I N I N G The reduction in the Chinese demand and the abundant supply of iron ore have continued to pressure PLATTS prices, which reached, on average, US$62.4/t in the 1Q15, against US$74.3/t in the 4Q14 (62% Fe, CFR China). At the end of the 1Q15, the iron ore price reached even lower levels, achieving US$51.3/t. Operational and Sales Performance - Mining In the 1Q15, production volume was 1.5 million tons, stable in relation to the 4Q14. Sales volume recorded in the 1Q15 was 1.1 million tons, also stable in relation to the 4Q14. There was lower sales volume to the Ipatinga and Cubatão plants, partially compensated by higher sales to third parties in the domestic market. Production and sales volumes are shown in the following chart: Iron Ore Thousand tons Production Sales - Third Parties - Domestic Market Sales - Exports Sales to Usiminas Total Sales 1Q15 4Q14 1Q14 Chg. 1Q15/4Q14 1,461 1,452 1,618 1% 91 39 298 133% 0 0 509 - 1,048 1,122 957 -7% 1,139 1,161 1,765 -2% Comments on the Business Unit Results - Mining Net revenue in the Mining Unit was R$117.9 million, against R$87.3 million in the 4Q14, a 35.0% increase, due to lower payments regarding freight contracts with take or pay conditions in R$37.2 million which are accounted for as a reduction of the gross revenue. Although in the quarterly comparison, the PLATTS iron ore price reference (62%, FE, CFR China), adjusted for the period sales pricing regarding Mineração Usiminas, had recorded a decrease of 16.3%, this was partially compensated by an average exchange devaluation of 12.8% in the period. Cash cost per ton decreased 4.1% due to lower costs with direct labor, third parties’ services, electric energy and fuels. Cost of Goods Sold (COGS) per ton increased 14.0% in the 1Q15, if compared with the 4Q14, as a result of a revision in the useful life of some assets, which caused increase in depletion. Net operating expenses were R$15.1 million, against R$4.0 million in the 4Q14. Although a reduction in direct labor and third parties’ services was achieved, there was provision for freight contracts with take or pay conditions in R$8.4 million and lower sale revenue of surplus electric energy, that was R$9.1 million in the 1Q15, against R$22.0 million in the 4Q14. Thus, Adjusted EBITDA was R$43.0 million in the 1Q15, 82.7% higher than in the 4Q14, which was R$23.5 million. Adjusted EBITDA margin was 36.5% in the 1Q15, against 26.9% in the 4Q14, a growth of 950 basis points, even with lower sale revenue of surplus electric energy. Investments (CAPEX) Investments in the 1Q15 were R$24.7 million, against R$21.4 million in the 4Q14, related to sustaining CAPEX. 1Q15 Results 7 Stake in MRS Logística Mineração Usiminas holds a stake in the MRS Logística through its subsidiary UPL – Usiminas Participações e Logística S.A. MRS Logística is a concession that controls, operates and monitors the Brazilian Southeastern Federal Railroad Network (Malha Sudoeste da Rede Ferroviária Federal). The company operates in the railway transportation segment, connecting the states of Rio de Janeiro, Minas Gerais and São Paulo, and its core business is transporting with integrated logistics of cargo in general, such as iron ore, finished steel products, cement, bauxite, agricultural projects, pet coke and containers. MRS transported 38.0 million tons in the 1Q15, an increase of 5.1% over the same period of 2014. This result mainly reflected the higher iron ore flow, which increased 9.1% in the period. There was also an increase in the transportation of steel products by 11.4%, agricultural products by 8.3%, especially sugar and soybeans, and shipping containers by 23.0%, in comparison with the 1Q14. In relation to the 4Q14, MRS transported a 12.6% lower volume, due to the seasonality that typically favors the transportation at the end of the year over the first quarter. II) STEEL The World Steel Association - WSA forecasts that apparent steel consumption will reach 1.55 billion tons in 2015, an increase of 0.6% compared with 2014. For the advanced economies, the expectation is for consumption stability. For the emerging economies, it forecasts a 2.8% increase, driven by India, where consumption should increase 6.2%. China, the largest global consumer, with 707.2 million tons, should reduce consumption by 0.5%, the first decrease since 1995. Among the emerging countries, Brazil will have the worst performance. The Brazilian Steel Institute - IABr forecasts a decline in the apparent consumption of 7.8% in 2015, with flat steel receding 6.0%. In the 1Q15, the Brazilian flat steel market consumed 3.2 million tons, with 84% of the volume supplied by local facilities and 16% by imports. Although import volume has not reduced in the 1Q15, the trend of a devaluated foreign exchange rate in 2015 should result in lower direct and indirect steel imports. Below are listed the main flat steel consuming segments and their behavior in the Brazilian market during the 1Q15: Automotive: Low economic activity together with high inflation, high interest rates and loss of consumer confidence have caused the automotive industry to begin the year with poor results and strong retraction of its main indicators. In the 1Q15, data from the National Federation of Automobile Distributors - FENABRAVE accounted for a 31% decline in vehicles sales in relation to the 4Q14, that was, in part, expected, since December registered strong purchasing anticipation due to the end of the IPI tax cuts and the new rules of the PSI/FINAME from January 2015 on. Automotive production was reduced by 13% compared with the 4Q14, according to data from the Brazilian Automotive Manufacturers Entity - ANFAVEA. Industrial: According to Tendências Consulting, a reduction of 13.8% is expected in the investment rate in the 1Q15 in relation to the 4Q14, registering a decline in the last four consecutive quarters. The Brazilian Machinery and Equipment Association - ABIMAQ will concentrate its efforts over the year to increase exports of capital goods in order to reduce the impact of the retraction in the domestic market. White Goods: According to the Industrial Survey performed by the Industrial Research of Brazilian Geography and Statistics Institute - IBGE, the Home Appliance segment registered a decline of 23.6% in the accumulated production in 2015 in relation to the same period of the previous year. The segment has been affected by the slower growth rate in the family income, by the unemployment and by a more restrictive Brazilian economic policy. In the electro1Q15 Results 8 electronics segment, performance has also been poor, showing a decline of 8.8% in production, considering the same basis of comparison. Civil Construction: The civil construction market continues to be weak in the 1Q15, as a result of of the poor economic performance, fiscal adjustments and low consumer confidence. According to Tendências Consulting, production of typical inputs to civil construction is forecast to fall 3.5% in the 1Q15 in relation to the 4Q14. Distribution: According to the Steel Distributors National Association - INDA, flat steel sales in the distribution network fell 19.4% in the 1Q15, against the 4Q14. Purchases had a smaller decline, 8.1%, in comparison with the same period. Inventories remained stable at around 1.1 million tons, but the higher reduction in sales over the quarter caused inventories turnover to increase to 3.3 times, considering March sales as the basis. Production - Ipatinga and Cubatão Plants In the 1Q15, crude steel production at the Ipatinga and Cubatão plants was 1.4 million tons, stable in relation to the 4Q14. Production (Crude Steel) 1Q15 4Q14 1Q14 Chg. 1Q15/4Q14 Ipatinga Mill 739 823 934 -10% Cubatão Mill 640 574 718 11% 1,379 1,397 1,652 -1% Thousand tons Total Sales Total sales in the 1Q15 were 1.3 million tons of steel, stable in relation to those of 4Q14. Domestic market sales accounted for 1.1 million tons, a 10.0% increase compared with the 4Q14. Export volume in the 1Q15 decreased 37.8% in relation to the 4Q14, totaling 150.6 thousand tons in the 1Q15. There was substantial market mix improvement, with sales volume registering 88% in the domestic market and 12% in exports. 1,437 1,456 169 220 1,268 1,236 1T14 2T14 1,401 1,247 1,256 242 151 1,064 1,005 1,106 3T14 4T14 1T15 337 Domestic Market 1Q15 Results Exports 9 The main export destinations are shown in the graph below: 1% 5% 2% USA 6% Argentina 7% Mexico 45% Taiwan Venezuela Chile Others 34% Sales Volume Breakdown Thousand tons Total Sales 1Q15 4Q14 Change 1Q15/4Q14 1Q14 1,256 100% 1,247 100% 1,437 100% 1% Heavy Plates 287 23% 280 22% 279 19% 3% Hot Rolled 418 33% 400 32% 517 36% 4% Cold Rolled 312 25% 295 24% 377 26% 6% Galvanized 214 17% 203 16% 215 15% 5% 7 1% 7 1% 26 2% 0% 19 1% 62 5% 23 2% -69% Processed Products Slabs Domestic Market 1,105 88% 1,005 81% 1,268 88% 10% Heavy Plates 261 21% 232 19% 228 16% 12% Hot Coils 341 27% 282 23% 465 32% 21% Cold Coils 285 23% 268 21% 336 23% 6% Galvanized 194 15% 183 15% 198 14% 6% 7 1% 7 1% 25 2% -8% 19 1% 33 3% 17 1% -42% 151 12% 242 19% 170 12% -38% Heavy Plates 27 2% 48 4% 51 4% -45% Hot Rolled 77 6% 118 9% 52 4% -35% Cold Rolled 27 2% 27 2% 41 3% -1% Galvanized 21 2% 20 2% 17 1% 2% Processed Products 0 0% 0 0% 1 0% - Slabs 0 0% 29 2% 7 0% - Processed Products Slabs Exports Comments on the Business Unit Results - Steel In the 1Q15, net revenue in the Steel Unit was R$2.6 billion, 4.0% higher than in the 4Q14, due to greater share of sales in the domestic market, whose volume grew 10.0% in relation to the 4Q14. Also contributed to this result, the higher average sales price in the domestic market by 0.5% and the better export product mix, both comparing the 1Q15 with the 4Q14, and the Dollar appreciation of 12.8%, on average, in the period. 1Q15 Results 10 In the 1Q15, the cash cost per ton was higher by 5.0% due to the impact of the foreign exchange rate devaluation of 12.8%, on average, in the period, which impacts around 40% of total costs, and to higher energy costs. In the other way, in the 1Q15, COGS per ton was 2.7% lower compared with the 4Q14, due to the sales mix. Sales expenses were R$30.2 million in the 1Q15, 32.3% lower than those in the 4Q14, mainly due to lower export volume and to lower provisions for doubtful accounts. General and administrative expenses totaled R$89.1 million, against R$100.7 million in the 4Q14, a decline of 15.6%, mainly due to the reduction of 38.4% in third parties’ services. Other operating expenses and income totaled an expense of R$33.0 million in the 1Q15, against an income of R$79.0 million in the 4Q14, mainly as a result of lower sale revenue of surplus electric energy, which totaled R$18.8 million in the 1Q15, against R$68.3 million in the 4Q14, and of lower contribution of the Reintegra Program in R$4.4 million in the period. In this manner, net operating expenses totaled R$152.3 million, higher by R$86.0 million than those in the 4Q14. Thus, Adjusted EBITDA in the 1Q15 was R$337.2 million, 25.6% higher than that in the 4Q14, which was R$268.4 million. Adjusted EBITDA margin reached 13.2% in the 1Q15, against 10.9% in the 4Q14, an increase of 230 basis points. Investments (CAPEX) In the 1Q15, investments totaled R$197.6 million, against R$297.9 million in the 4Q14, mainly in function of the seasonality of the period. The main investments were with sustaining CAPEX and the revamping of Coke Plant II in Ipatinga. The Coke Plant revamping will increase own coke production and is forecast to start up in the 2Q15. III) STEEL TRANSFORMATION Soluções Usiminas – SU Soluções Usiminas operates in the distribution, services and small-diameter tubes markets nationwide, offering its customers high-value added products. It serves several economic segments, such as automotive, autoparts, civil construction, distribution, electro-electronics, machinery and equipment and household appliances, among others. In the 1Q15, sales of the Distribution, Services and Tubes Business Units were responsible for 53%, 40% and 7%, respectively, of the sales volume. Comments on the Business Unit Results – Steel Processing Net revenue in the 1Q15 totaled R$539.7 million, 5.9% lower than in the 4Q14, due to lower sale and services volume. In the 1Q15, cost of goods sold was R$526.5 million, 8.1% lower compared with the 4Q14, which was R$572.9 million, as a result of lower sale and services volume, as well as in function of operational improvements. Operating expenses were R$24.4 million in the 1Q15, against R$16.9 million in the 4Q14, a 44.4% increase, mainly in function of the sale of an operational asset in the amount of R$23.9 million occurred in the 4Q14. Thus, in the 1Q15, Adjusted EBITDA was a negative R$3.6 million, against a negative R$5.7 million in the 4Q14. Adjusted EBITDA margin was -0.7% in the 1Q15, against -1.0% in the 4Q14. 1Q15 Results 11 IV) CAPITAL GOODS Usiminas Mecânica S.A. Usiminas Mecânica is a capital goods company in Brazil which operates in the following business areas: steel structures, shipbuilding and offshore, oil and gas, industrial equipment and assembly and foundry and railcars. Main Contracts In the 1Q15, amendment contracts with Vale and Usiminas were signed for complementary services, allowing that its book of orders be kept in a level above R$800.0 million, even though in a scenario of lack of investments in the country. Comments on the Business Unit Results – Capital Goods In the 1Q15, net revenue was R$210.8 million, 10.8% higher than in the 4Q14, which was R$190.2 million, due to higher volume supplied by the assembly, equipment and railcar segments. Gross profit was R$25.7 million in the 1Q15, 81.7% higher than that of the 4Q14, due to higher profitability of its projects portfolio in this period due to productivity gains and costs and expenses reduction. Thus, Adjusted EBITDA in the 1Q15 totaled R$14.2 million, against R$4.5 million in the 4Q14. Adjusted EBITDA margin in the 1Q15 was 6.7%, against 2.4% in the 4Q14, a growth of 430 basis points. Events Subsequent to the End of the Quarter Extraordinary Shareholders’ Meeting (ESM): The ESM was held on 04/06/15 and elected the Members of the Board and their substitutes for a mandate until the Ordinary Shareholders’ Meeting of the Company in 2016, as well as, the Chairman of the Board. Such documents are available on the websites of CVM (www.cvm.gov.br), BM&FBOVESPA (www.bmfbovespa.com.br) and the Company (www.usiminas.com/ri). Annual Shareholders Meeting (ASM): At 1:00PM on 04/28/15, the ASM of Usiminas will be held to deliberate on the following issues: (1) “tomar as contas dos administradores”, analyze, discuss and vote for the financial statements and the annual report referring to the fiscal year ending on 12/31/14; (2) proposal of the net profit application accounted for in the fiscal year of 2014 and approval of the capital budget for the fiscal year of 2015; (3) proposal by the Executive Board for dividend payment and definition of the date of the respective payment; (4) definition of the global compensation amount of the Management for the period up to the 2016 ASM of the Company; (5) election of the members of the Fiscal Council and their substitutes for a mandate up to the 2016 ASM of the Company, as well as, definition of their respective compensation. The documents are available to shareholders at the Company headquarters and on the websites of CVM (www.cvm.gov.br), BM&FBOVESPA (www.bmfbovespa.com.br) and the Company itself (www.usiminas.com/ri). 1Q15 Results 12 Highlight Usiminas is one of the finalist in the automotive industry award: Usiminas is one of the finalists in the REI Award (Recognition of Excellence and Innovation), hosted by Automotive Business magazine. The objective of the award is to distinguish performance and achievement of professionals and companies in the automotive supply chain. Usiminas is competing in the material suplier category, with the case “Development of Dual Phase 1000 steel”, which stands out as an ultra-high strength steel, whose application is directly linked to safety and weight reduction of the vehicle. The result will be released in June. Capital Markets Usiminas Performance Summary - BM&FBOVESPA (USIM5) 1Q15 Number of Deals Daily Average Traded - thousand shares Daily Average Financial Volume - R$ million Daily Average Maximum Minimum Closing Market Capitalization - R$ million 488,983 8,016 523,965 8,590 2,237 37 5.19 3.35 4.97 5,039 4Q14 738,942 11,918 423,604 6,832 2,368 38 6.85 4.32 5.05 5,120 Change 1Q15/4Q14 -34% -33% 24% 26% -6% -3% -24% -22% -2% -2% 1Q14 868,117 13,780 438,819 6,965 4,897 78 14.08 8.52 10.23 10,371 Change 1Q15/1Q14 -44% -42% 19% 23% -54% -53% -63% -61% -51% -51% Performance on the BM&F BOVESPA Usiminas’ Common shares (USIM3) closed the 1Q15 quoted at R$21.50 and its Preferred shares (USIM5) at R$4.97. In the quarter, USIM5 depreciated 1.6% and USIM3 appreciated 74.8%. In the same period, the IBOVESPA index appreciated 2.3%. Foreign Stock Markets OTC – New York Usiminas has American Depositary Receipts (ADRs) traded on the over-the-counter market: USDMY is backed by common shares and USNZY backed by Class A preferred shares. On 03/31/15, greater liquidity USNZY ADRs were quoted at US$1.58 and depreciated 15.1% in the quarter. Latibex – Madrid Usiminas’ shares are traded on the LATIBEX – the Madrid Stock Exchange: XUSI as preferred shares and XUSIO as common shares. On 03/31/15, XUSI closed quoted at €1.48, depreciating 8.1% in the quarter. XUSIO shares closed quoted at €6.26, an appreciation of 61.0% in the period. 1Q15 Results 13 For further information: GERÊNCIA GERAL DE RELAÇÕES COM INVESTIDORES Cristina Morgan C. Drumond [email protected] 31 3499-8772 Leonardo Karam Rosa [email protected] 31 3499-8550 Diogo Dias Gonçalves [email protected] 31 3499-8710 Renata Costa Couto [email protected] 31 3499-8619 Press: please contact through e-mail [email protected] Visit the Investor Relations site: www.usiminas.com/ri or access on your mobile phone: m.usiminas.com/ri 1T15 Conference Call Results - Date 04/23/2015 In Portuguese - Simultaneous Translation into English Brasília time: at 11:00 a.m. New York time: at 10:00 a.m. Dial-in Numbers: Dial-in Numbers: Brazil: (55 11) 3193-1001 / 2820-4001 USA: (1 786) 924-6977 Audio replay available at (55 11) 3193-1012 Pincode for replay: 2135598# - Portuguese Pincode for replay: 1905865# - English Audio of the conference call will be transmitted live via Internet See the slide presentation on our website: www.usiminas.com/ri Statements contained in this release, relative to the business outlook of the Company, forecasts of operating and financial income and references to growth prospects are mere forecasts and were based on the expectations of Management in relation to future performance. These expectations are highly dependent on market conduct, the economic situation in Brazil, its industry and international markets and, therefore, are subject to change. 1Q15 Results 14 Balance Sheet - Assets - Consolidated | IFRS - R$ thousand Assets Current Assets Cash and Cash Equivalents Trade Accounts Receivable Taxes Recoverable Inventories Advances to suppliers Financial Instruments Other Securities Receivables 31-Mar-15 31-Dec-14 8,542,517 2,621,043 1,380,296 383,123 3,910,490 22,120 72,225 153,220 8,245,211 2,851,903 1,246,694 358,418 3,516,751 17,848 65,392 188,205 Long-Term Receivable Deferred Income Tax & Social Contribution Deposits at Law Accounts Receiv. Affiliated Companies Taxes Recoverable Financial Instruments Others Investments Property, Plant and Equipment Intangible 22,441,466 3,426,528 2,134,632 584,473 4,722 90,810 386,038 225,853 1,155,951 15,492,069 2,366,918 22,238,851 3,179,812 2,018,129 566,408 22,383 95,835 252,027 225,030 1,145,787 15,535,573 2,377,679 Total Assets 30,983,983 30,484,062 Non-Current Assets 31-Mar-14 9,241,989 2,913,979 1,736,898 305,896 4,068,636 13,052 49,372 154,156 21,849,181 2,768,902 1,851,482 565,200 21,268 109,654 39,832 181,466 1,201,463 15,481,317 2,397,499 31,091,170 Balance Sheet - Liabilities and Shareholders' Equity - Consolidated | IFRS - R$ thousand Liabilities and Shareholders' Equity 31-Mar-15 31-Dec-14 31-Mar-14 Current Liabilities Loans and Financing and Taxes Payable in Installments Suppliers, Subcontractors and Freight Wages and Social Charges Taxes and Taxes Payables Related Companies Financial Instruments Dividends Payable Customers Advances Others 5,048,230 1,731,091 2,235,161 280,196 133,509 241,783 135,708 38,368 101,687 150,727 4,769,426 1,713,451 1,948,744 280,284 116,949 338,357 94,045 30,937 110,179 136,480 4,921,801 1,410,723 2,330,740 259,912 163,670 144,520 54,141 1,121 133,699 423,275 Long-Term Liabilities Loans and Financing and Taxes Payable in Installments Actuarial Liability Provision for Legal Liabilities Financial Instruments Environmental Protection Provision Others 7,445,663 5,417,692 1,202,560 497,117 205,489 89,372 33,433 6,953,021 4,988,296 1,187,788 475,859 182,216 85,143 33,719 7,142,870 5,247,038 1,246,574 482,764 50,134 78,643 37,717 Shareholders' Equity Capital Hedge Accounting Reserves & Revenues from Fiscal Year Non-controlling shareholders participation Total Liabilities and Shareholders' Equity 1Q15 Results 18,490,090 12,150,000 4,294,558 2,045,532 18,761,615 12,150,000 4,569,664 2,041,951 19,026,499 12,150,000 0 4,717,273 2,159,226 30,983,983 30,484,062 31,091,170 15 Income Statement - Consolidated | IFRS R$ thousand Net Revenues Domestic Market Exports COGS Gross Profit Gross Margin Operating Income (Expenses) Selling Expenses General and Administrative Other Operating Income (expenses) Reintegra Program (Brazilian Government Export Benefit) Net Cost of Actuarial Obligations Provision for Legal Liabilities Result of the Non Operating Asset Sale/Write-Off Result of the Sale of the Surplus Electric Energy Other Operating Income (Expenses), Net EBIT EBIT Margin Financial Result Financial Income Financial Expenses Equity in the Results of Associate and Subsidiary Companies Operating Profit (Loss) Income Tax / Social Contribution Net Income (Loss) Net Margin Attributable: Shareholders Minority Shareholders EBITDA (Instruction CVM 527) EBITDA Margin (Instruction CVM 527) Adjusted EBITDA - Joint Subsidiary Companies proportional EBITDA Adjusted EBITDA Margin Depreciation and Amortization 1Q15 Results 1Q15 4Q14 1Q14 Chg. 1Q15/4Q14 2,680,422 2,349,706 330,716 (2,436,800) 243,622 9.1% (208,144) (51,154) (122,471) (34,519) 7,525 (3,954) (31,284) 373 27,865 (35,044) 35,478 1.3% (360,900) 368,863 (729,763) 11,971 (313,451) 78,071 (235,380) -8.8% 2,585,195 2,160,261 424,934 (2,527,044) 58,151 2.2% (101,130) (72,235) (134,241) 105,346 11,920 (1,276) (3,831) 24,814 90,429 (16,710) (42,979) -1.7% (213,761) 200,542 (414,303) 44,147 (212,593) 95,263 (117,330) -4.5% 3,142,318 2,722,815 419,503 (2,622,623) 519,695 16.5% (183,207) (83,594) (128,161) 28,548 (1,289) (8,187) 3,607 74,973 (40,556) 336,488 10.7% (18,057) 47,178 (65,235) 44,284 362,715 (141,087) 221,628 7.1% 4% 9% -22% -4% 319% +690 b.p 106% -29% -9% -37% 210% 717% -98% -69% 110% -183% +300 b.p 69% 84% 76% -73% 47% -18% 101% +420 b.p (247,460) 12,080 353,879 13.2% 379,534 14.2% 306,430 (143,382) 26,052 290,941 11.3% 301,796 11.7% 289,773 184,614 37,014 647,860 20.6% 655,385 20.9% 267,088 73% -54% 22% +190 b.p 26% +250 b.p 6% 16 Cash Flow - Consolidated | IFRS R$ thousand Operating Activities Cash Flow Net Income (Loss) in the Period Financial Expenses and Monetary Var. / Net Exchge Var. Interest Expenses Depreciation and Amortization Losses/(Gains) on Sale of Property, Plant and Equipment Equity in the Results of Subsidiaries/Associated Companies Difered Income Tax and Social Contribution Constitution (Reversal) of Provisions Actuarial Gains and losses Stock Option Plan Total (Increase)/Decrease of Assets Accounts Receivables Customer Inventories Recovery of Taxes Judicial Deposits Accounts Receiv. Affiliated Companies Others Total Increase (Decrease) of Liabilities Suppliers, Contractors and Freights Amounts Owed to Affiliated Companies Customers Advances Tax Payable Actuarial Liability Payments Others Total Cash Generated from Operating Activities 1Q15 4Q14 (235,380) 538,807 17,148 306,430 (446) (11,971) (97,727) 23,824 4,054 2,049 546,788 (117,330) 222,841 42,135 289,773 (24,911) (44,147) (43,729) 36,958 1,276 (3,298) 359,568 (132,178) (381,716) (54,291) (18,184) 17,661 24,617 (544,091) 253,204 182,524 (27,760) (6,145) (437) 1,931 403,317 286,417 (96,574) (8,492) 8,576 (38,649) 19,999 171,277 (38,665) 197,509 (68,847) (34,259) (65,389) (146,919) (156,570) 173,974 606,315 (126,019) 24,899 (124,805) (4,239) 72,854 477,271 (207,610) 0 0 (230,063) 1,566 0 1,279 (2,247) 197,443 10,486 (59,754) (336,794) 42,402 (16,578) 83,723 (6,330) (437,075) (85,402) 356,819 (435,339) (286) 18,074 (1,068) 4,327 (276,624) (58,398) (15,373) (73,027) Net Cash Generated from (Employed on) Financial Activities (61,800) (419,095) Exchange Variation on Cash and Cash Equivalents (12,449) 19,974 (438,470) (7,252) Cash and Cash Equivalents at the Beginning of the Period 2,109,812 2,117,064 Cash and Cash Equivalents at the End of The Period 1,671,342 2,109,812 RECONCILIATION WITH BALANCE SHEET Cash and Cash Equivalents at the Beginning of the Period Marketable Securities at the Beginning of the Period Cash and Cash Equivalents at the Beginning of the Period Net Increase (Decrease) of Cash and Cash Equivalentes Net Increase (Decrease) of Marketable Securities 2,109,812 742,091 2,851,903 (438,470) 207,610 2,117,064 939,534 3,056,598 (7,252) (197,443) Cash and Cash Equivalents at the End of the Period Marketable Securities at the End of the Period Cash and Cash Equivalents at the End of the Period 1,671,342 949,701 2,621,043 2,109,812 742,091 2,851,903 Interest Paid Income Tax and Social Contribution Net Cash Generated from Operating Activities Investments activities cash flow Marketable Securities Amount Received on Disposal (Acquisition) of Investments Amount Paid on the Acquisition of Investments Fixed Asset Acquisition Fixed Asset Sale Receipt Additions to / Payments of Intangible Assets Dividends Received Purchase of Software Net Cash Employed on Investments Activities Financial Activities Cash Flow Inflow of Loans, Financing and Debentures Payment of Loans, Financ. & Debent. Payment of Taxes Installments Swap Operations Liquidations Dividends and Interest on Capital Net Increase (Decrease) of Cash and Cash Equivalents 1Q15 Results 17