2. 2
Highlights
Growth in refractory solutions
• YTD, refractory volume grew 8.1% while ex-China steel market grew 6.2%
• Minerals recovered vs. 2Q11 but still below potential when compared to 3Q10
• Services was flat vs. 2Q11 but below 3Q10 due to completion of spot contract
Record high operating cash flow generation
•R$ 461 million YTD operating cash flow
•R$ 118.7 million EBITDA with a margin of 21.1% vs. 17.7% in 2Q11 and 19.0% in 3Q10
•R$ 148 million working capital reduction vs. 3Q10 (47-day shorter cash conversion cycle)
Gross margin trending up
• 31.7 % of gross margin vs. 31.4% in 2Q11
• 32.2% vs. 31.1% in refractory solutions (performance improvement while pressured by raw materials)
Vertical integration projects on track
• Brumado - in progress, financing postponed until november, start-up in 1Q12
• Graphite – acquisition of surface rights, enviromental license expected by 1Q12, start-up in 4Q12
4. 4
Refractory solutions by sector
Net revenue by sector
R$ million
+4.1%
3Q11
434.3
2Q11
457.7
3Q10
417.2
2Q11
68.7
3Q10
62.4
76.9
-18.9%
3Q11
9M10
+3.7%
9M11
1,312.51,265.8
9M11
-4.7%
206.4
9M10
216.6
Steel
Industrial
5. 5
Regions 1M11 Total
North America 1 14
Europe 1 8
Asia 1 4
South America 1 34
TOTAL 4 60
New CPP contracts
Number of contracts
CPP contracts
Number of contracts
Refractory Solutions - CPP
35% of revenues
from the steel sector
605959595652
47
424036
31272624
4Q11
3Q11
2Q11
1Q11
4Q10
3Q10
2Q10
1Q10
4Q09
3Q09
2Q09
1Q09
2008
Before
2008
60
24
Total
4Q11
1
3Q11
0
2Q11
01Q113
2010
16
2009
14
2008
2
Before2008
7. 7
Cash generation and net income
Net income
R$ million
EBITDA
R$ million, %
Cash flow from Operations
R$ million
+9%
+12%
3Q11
34.4
2Q11
30.8
3Q10
31.6
2.2 x
4.6 x
3Q11
188.4
2Q11
85.8
3Q10
41.3
+9%
+15%
3Q11
118.7
21.1
2Q11
103.2
17.7
3Q10
108.5
19.0
R$ 461 million
YTD
8. 8
Working capital and cash conversion cycle
47 -day shorter cash convesion
cycle vs. 3Q10
Cash conversion
Days
Working capital
R$ million
R$ 148 million reduction
vs. 3Q10 (additional R$ 43 million
over 2Q11 at constant currency)
747.7
-16%
3Q11
adj
3Q11
787.7
2Q11
790.6
1Q11
805.2
4Q10
832.6
3Q10
935.4
139146146153161
193
135
145
129129129
154
6976
65564840
3Q11 adj3Q112Q111Q114Q103Q10
Suppliers
Inventories
Cash conversion cycle