CSN(SID) - 2021 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a record EBITDA of BRL5.8 billion for Q1 2021, with a margin of 48%, reflecting strong cost control and profitability across segments [19][20] - The net debt/EBITDA ratio improved to 1.29x, with a target to reach below 1.0x in the near future [19][23] - Cash generation was strong at BRL3.5 billion, despite a slight drop due to dividend payouts [22] Business Line Data and Key Metrics Changes - The Steel segment achieved the best sales volume since 2016, with an EBITDA margin of 27% and expectations for double-digit growth in volumes sold for 2021 [26][27] - The Mining segment reported a record EBITDA of BRL3.7 billion, with a 47% increase in volumes compared to the previous year [29] - The Cement segment experienced a growth of 19%, with maximum production and sales levels reached, and plans for an IPO to fund further growth [30][31] Market Data and Key Metrics Changes - Domestic and international demand for steel remains strong, with significant price increases observed globally [8][10] - The company anticipates continued growth in the Brazilian market, projecting a 10% growth rate for 2021, which is higher than other industry forecasts [66] Company Strategy and Development Direction - The company is focused on deleveraging and aims to achieve an investment grade rating by the end of the year [19][53] - Plans for an IPO in the Cement business are underway, with a strategy to enhance market position through both organic growth and M&A opportunities [16][31] - The company is adapting its trade policy to better align with market conditions and improve pricing strategies [45][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second quarter being better than the first, driven by strong demand and improved production capabilities [15][58] - The company is closely monitoring international market dynamics, particularly regarding China's steel production and its impact on global supply [12][48] - There is a strong focus on sustainability and ESG initiatives, with significant progress reported in safety and environmental management [33][36] Other Important Information - The company has made strides in reducing accident frequency rates, achieving a 19% reduction compared to historical averages [33] - The company is actively working on diversifying its product offerings and enhancing its market presence through strategic initiatives [14][52] Q&A Session Summary Question: What new business opportunities is CSN considering? - Management highlighted the focus on infrastructure opportunities as the world recovers from COVID, with a strategic outlook on potential new business ventures [41] Question: How is CSN managing unprecedented price increases? - The company is successfully implementing price increases and adapting its pricing strategy to maintain margins, with a focus on distribution channels [42][44] Question: What are the growth plans for the Cement business? - The Cement segment is pursuing both organic growth and M&A opportunities, with several robust projects in the pipeline [62][63]