Companhia Siderurgica Nacional S.A.

Good morning, and thank you for holding. At this time, we would like to welcome everyone to CSN's earnings conference for the second quarter of 2025. Today, we have with us the company's executive officers. We would like to inform you that this event is being recorded, and all participants will be in listen-only mode during the company's presentation. And through this, we will go on to the question-and-answer session. We have simultaneous webcasts that may be accessed at ri.tsn.com.br where the presentation is also available. The replay of the event will be available after closing. Before proceeding, we would like to state that some of the forward-looking statements made herein are mere expectations or trends based on current assumptions and opinions of the company's management. Future results, performance, and events may differ materially from those expressed herein, which do not constitute projections. In fact, actual results, performance, or events may differ materially from those expressed or implied by forward-looking statements due to several factors such as general and economic conditions in Brazil and other countries, interest rates and exchange rate levels, or prepayment of debt pegged in foreign currencies, protectionist measures in the US, Brazil and other countries, changes in laws and regulations, and general competitive factors at a national and international level. We will now turn the conference over to Mr. Marco Revello, who will begin the company presentation. You may proceed, Mr. Revello. Good morning, everybody. It is very satisfying to present the results of CSN for the second quarter, 2024. We begin on page two where we show you the highlights for the quarter, showing our strong resiliency. The company had an epic growth in all segments except for mining, impacted exclusively by a drop in the iron ore prices. This performance shows the excellent management of costs and expenses and diversification of investments with synergy and a very assertive commercial strategy. We have had significant increases in competition with imported material. And, of course, we have the reflection of the tariffs increased by the United States. CSN reached an EBITDA of 2.6 million BRLs with a margin of 23.5%, an expansion of 5%, and 1.4 percentage points vis-à-vis the first quarter, 25%. Additionally, we're moving ahead in our deleveraging with a very active management of cash and reducing the growth debt. Only this quarter, the company reduced growth debt by 5.7 billion BRLs, even with the incorporation of new assets like Toda. taking leverage below seven points vis-à-vis last year, making CSN ever closer to its goals for the year. We go for the highlights of mining. The company had volumes that were the second highest sales in history. which shows not only that even in the dry period, we had enormous operational excellence throughout the last few months in the mine and throughout the logistic chain. Now, this increase in production and the diversification of fixed costs had an impact on cash, reaching less than $21 per ton this quarter, putting CSN in a very important position vis-à-vis world mining companies. Despite the improvement in volume, EBITDA of mining drop because of a correction of iron ore prices during the quarter. We go on to steel and we're very proud to show you the performance for this quarter. Perhaps this was one of the most difficult periods in terms of competition in the last few years. with a flood of imported material coming into Brazil. Despite this, we had a very conservative position, prioritizing volume over volume. We want to offer a higher return for the operation, This was a very assertive strategy. Contrary to the local producers that went into that war of prices and volumes, we were able to present a very strong performance, 4.5% higher prices vis-à-vis the second quarter, 24, and a stronger cost control during the period allowed us to have a Cost control results in a 79% increase year-on-year for EBITDA, and we reached 10.8% margin for the quarter. If we look at cement, we can observe that the favorable seasonality in the period points to the incredible resiliency with growing volumes in new launches with a quarterly growth of 8% in our sales volume. If we follow this dynamic, we also had a favorable reaction in prices, with an expansion of 10% net revenue vis-à-vis the first quarter, 25%, Now, this situation offset the cost pressure in raw material, allowing us a 2.3 percentage point increase in profitability with an EBITDA margin for cement of 24% for the period. Finally, and not less important, At the bottom of the slide, we have two great achievements for business and logistics, a new EBITDA record because of two factors, a very strong performance in the real modal And, of course, we have incorporated the TORON numbers, a recent acquisition. Now, the EBITDA reached 519 million BRLs in the first quarter with an EBITDA margin of 41.1%. In terms of energy, the results were extraordinary because of the increase of prices in the period, with an EBITDA five-fold higher than in the same period, 2024. Now, let's go on to the next slide where we show you our EBITDA margins and EBITDA for the second quarter. There's a quarterly increase of 5% for the period and a drop of EBITDA in mining offset with a sound growth in all of the other segments of the group. Once again, it's important to have a diversified operation, granting us greater resiliency and withstanding the pressures in some markets. As a result, the adjusted margin reached 23.5% for the second quarter, an increase of 1.4 percentage points for the quarter. On the next slide, we show you our investment activities for the period. You can see a growth of 18.2% in CAPEX vis-à-vis the previous quarter because of the seasonality of the period and the advance of the P15 infrastructure for the mining sector. Compared to the same period in 2024, CAPEX remains stable. with advances in mining offsetting the lower investment in the steel industry. This shows you a higher concentration since 2025 in expansion and productivity offset with the reductions that we have in some areas. Let's go on to slide number five, where we show you our networking capital. There has been an increase of 25% in the quarter. These are the same quarter last year, and we're trying to offset accounts receivable drop. On the following slide, we show you the adjusted cash flow that was negative by 1.4%. million BRLs, 1.73 million reais previously. Despite the growth during the period, this shows an increase in the volume of investments to accelerate expansion projects and the negative impact of financial expenses, especially the impact of the glass furnaces. the higher consumption of working capital also had a pressure on the cash flow for the period. In the next slide, we show you the net debt and leverage for the company and the debt during the quarter. In the graph to the left, the message is the new reduction of leverage that we have during the period, going from 3.33 times in the first quarter to 3.24 times this quarter. The company has been able to ally in efficient cash management with sound results maximizing volume with a cost control and, of course, an increase in efficiency. This is a continuous effort of the management during this year, reducing its growth debt. Only in this quarter, we had the reduction of 2.1%. 1 billion Reais for the quarter. For the year, it is 5.7 billion Reais less. Now, the company will comply with its guidance projected for the end of the year. And of course, this despite the moment of uncertainty and the lack of forecastability, but we continue on reducing our debt. We're working with recycling capital in the group as an alternative to liquidity and for our cash. The main project presently is that of CSN infrastructure, which is in its concluding stages. It will lead our negotiations until we have a more formal response at the end of the year. Consider the debt of CAAA, our debt will drop to 3.2 times and this will represent a reduction of 29 base points for the period. We now go on to slide number eight with our indebtedness profile. You can see that we're still in a rather comfortable position with our short and medium term obligations. we have sufficient money to comply with our commitments for the next three years. We also have a very active management in terms of lengthening the debt, extending the amortization term. focusing on long-term operations and the local capital market. We have begun bilateral contracts, primarily concentrating on amortization flows between 2027 and 2030. With this, we can go on to slide number 10, where we show you the highlights of the steel segment. In this first slide, you see the results of our commercial activity with a reduction of 11.5% in the sales, or 10% when compared to the... first quarter of 25. this is because of the strategy adopted during the period of prioritizing results and margins over volume the market has intense competition and literally a flooding of imported material we did not enter the price war we have lost a bit of market share but we see that the market is being highly pressured And in a consistent way, there is no adequate protection to guarantee a good protection. In the foreign market, it was somewhat lower due to seasonality and the impact of tariff disputes on foreign trade and on seed dumpings. measures throughout the world. When we look at the following slide, steel production, we see that the drop in production is due to the maintenance and shutdown of glass furnace 2. It begins to show the positive results for the cost of slab and performance per ton. To the right, we can see that the cost of production dropped during the quarter, while the reforms per ton create a performance which is almost double than what we saw in the last quarter. This efficiency can only be shown after we improved the operations of our steel product. Now, let's go on to the financial performance of the steel mill. And we see a different anatomy in our results because of the strategy. We have revenues dropping because of the lower volume sold. but offset with an improvement of prices during the period. We have a sound recovery of EBITDA, 79% higher than the same period in 2024, and with an EBITDA margin of two digits reaching 10.0%. This increase in profitability is because of the strategy followed by the company, avoiding the prices and focusing on products with a higher profitability. All of this is even more impressive when we consider what is happening in the market, the flooding of imported material and the measures implemented by other countries, especially the United States. In this context, CSN has been able to deliver stronger epitaphs in 2025, and steel is an important vector of growth for this year. We now go on to the mining segment on slide 14. You see the results of production and sales for the last quarter. There are two extraordinary results here. A record of production, the highest volume produced in the history of the company, and but we also have the operational efficiency that the company has been able to achieve in the last few months, in the mine and in the chain of logistics. This is the second highest volume of sales in our history, with 11.8 million tons sold, reflecting the operations that are excellent and the level of efficiency reaching very close to its capacity limits. regarding the financial performance on slide 15. Even with the operational efficiency that we saw in the previous slide, we are charging $10 less than what we had in the previous quarter. Well, the price of iron ore has dropped during the quarter. In the case of EBITDA, the situation was not different. With a strong volume of sales, the EBITDA in mining had a drop of 36% vis-a-vis the first quarter of 2025. This related to a drop in the price of iron ore, because of the demand in China and the strong impact of the tariff disputes in the United States. In the following slide, we have the EBITDA reconciliation with the previous quarter. We can see that the decline in EBITDA occurred despite the increase in volume, improvement in mix, and cost reduction due to a drop in prices. Let's go on to analyze cement on slide 18. We have the sales volume for the quarter. Once again, we see a very dynamic segment despite the interest rate with the program My House, My Life, and because of the robust volume of launches keeping up the consumption of cement. We have been able to make the most of our logistics network to capture new markets. We had a growth of 8% in the sales. That is proof of this trend. When we compare this with the same period of last year, there's a minor drop of 4% on a very strong comparison base. On the following slide, we have the financial performance of the second month. This year, we have a quarterly increase in net revenue in EBITDA. This result was thrust because of the positive seasonality in the period. We had drier weather, and we also had a sound launch activity, EBITDA an increase of 21%. showing that although the circumstances surrounding us are very difficult, especially because of the interest rates, the sector continues to show strong new launch activity and a robust profitability. Finally, we will go on to our logistics segment, and the main highlight is the incorporation of Thora. We have done this to strengthen our logistics sector and to enhance the synergy with the other businesses of the group. Nowadays, Soda has 75 branch offices, seven enterprises, five multimodal terminals, and three owned and third-party vehicles and a driveport. The company invoiced 319 million reais with an EBITDA of 86 million BRLs and a very interesting margin of 27%. We go on to slide 22. With the financial performance of all of our logistic assets, during the quarter we had an extraordinary performance with a record in results. attaining higher levels of efficiency in the cargo handling and shipment. We had an evolution in net revenue, and we attained 519 million BRLs for EBITDA and an EBITDA margin of 44.1%. Well, the drop-in EBITDA is due exclusively to the acquisition of TORA. This modal, rail modal, of course, has one that is somewhat lower than railroad in general. Now, with this, I would like to end the presentation for this segment, and I give the floor to Elena Guerra to speak about ESG highlights. Good morning, everybody. Well, the results of the last quarter continue to show the strides in our ESV journey. In terms of occupational health and safety, we have consistency. They are 30% lower than the results we had a few years ago in 2020. We are now in another level. We continue to present a lower number of high potential severity events, which has been the focus of our actions in 2025. In the environmental agenda, we have very positive indicators. We have a reduction in water intensity and steel production. And in our decarbonization journey, we had a slight increase in the emissions from the steel plant because of the increase in volume, but we reached a reduction of 11% in GHG emissions. compared to the baseline year 2020, and 3% of THC emissions compared to the baseline year 2020. Now, we want a cost-efficient decarbonization with investments and projects that will increase our operational efficiency and, of course, reduce our CO2 emissions. All of our tailings dams are stable and de-characterization in line with the project we have set forth. In the social and DEI agenda, we have made steps. We have more than 520 women that have been added when compared to 2024. This is an increase of almost 80% of female representation since we began this goal in 2020. We also have a 5% increase in the number of women in leadership. We have received the Hugo Wernick Award for Environmental and Sustainability, and we're working with Garoto Cidadan Project that for 25 years has been changing the lives of youngsters. And finally, we have a protocol reinforcing the quality and transparency of our information, the permanence of the company in Fitzy for Good, We're also part of Pussy Russell because we have consistent practices and a constant evolution when it comes to social and governance indicators. Thank you. Elena, I will now give the floor to our chairman, Benjamin Steinbrook. Good morning, everybody. Once again, the presentation of results of CNSEN. I would like to mention some points specifically that were conveyed and presented by Marcos.

First of all,

I would like to underscore the operational results that we have been able to achieve in all of our activities. The improvement of industrial performance, a reduction of costs, and an enhancement in productivity. This, of course, is our number one priority at present. We had already presented good results in mining as well as in cement. from the viewpoint of cost and productivity. And we have had significant evolution in steel, in the steel mill, as we have been mentioning through time. And we now see the results of this. We're working with less equipment. We're attempting to increase production. and of course to improve our costs. This is our main priority at present and we are undergoing evolution in terms of the steel mill and the results have begun to appear from the viewpoint of all of our other activities. We have had very good performance and, of course, we have had challenges because of the imported products. In the case of the steel mill, everything is coming in in a highly disorganized and exaggerated fashion. We are the only country that has allowed this literal flood of imported products, and this has a negative impact on the market, of course, as well. We're offering them our domestic demand, domestic demand for imported products. And this has completely disorganized the sector. The import levels are much higher than the CSN production per se and brings about a hostile environment, a disorganized and aggressive environment. which hampers, overly hampers everything that is produced in Brazil. Now, that issue of imported products, something we have been fighting against, we have been negotiating to the government with, and although our conversations are heard by the Ministry of Industry and Development, we have not made any strides. We have been involved in this conversation for quite some time without any concrete measure being taken. We're waiting for the manifestation of the Brazilian government. All other countries have set forth protectionist measures. Now, without mentioning the U.S. to export there, we would have a tariff increase of 50%, which makes any attempt or idea to export there unfeasible for the moment. I hope that at some point in time these measures will come because this sector is suffering much too much because of imported products. Cement has had a good performance, good growth and good demand. We have significant internal competitiveness among the producers of Brazil.