EarningsEarnings CallCall 1Q131Q13

May 10May 10th, 2013, 2013

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New strategic view

Vision:Be the best provider of refractoriessolutions and industrial minerals,

leveraging and developing our minerals base

Expand industrial Ensure leadership Maintain a global low Grow selectively and

On

eg

lob

al

org

an

iza

tio

n

Expand industrial minerals base

Ensure leadership in our core markets

Maintain a global low cost production base

Grow selectively andaggressively

Continue to develop high quality, low cost raw material sources to support our current

businesses as well as new businesses where

we can have a sustainable competitive

advantage

Strive to keep offering high quality and

innovative products, unrivaled services and

cost performance

Optimize production globally to improve

efficiency and support growth

Develop global supply chain management

Pursue long term growth opportunities in selected

markets where we can deliver superior value to

our customers and shareholders

▪Meritocracy▪Ethics

▪Profit▪Management and Method

▪Agility and Transparency▪Respect for Safety, Environment and Communities

▪Customer▪People

Our values

2

DMR (manufacturing unit in China)

Low cost production base: The plant is located in the city of Dalian, northeast China,region which owns around 20% of world’s reserves of magnesite, making ita highly strategic location for refractory production

New markets: This new plant will allow us to better serve geographies

Recent aquisitionsMaintain a global low

cost production

base

Grow

selectively

and

aggressively

New markets: This new plant will allow us to better serve geographiesand segments where Magnesita has a marginal presence todayand where we want to expand sales in a selective way

Location: Dalian is an important export hub in China withexcellent logistics

Capacity: 50.000 tons/year

Closing: Expected to occur in ~60 days, after approvalof the Economic and Trade Bureau of Dalian Development Area,in the People´s Republic of China.

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in the People´s Republic of China.

DMR external viewChina

CHINA

Reframec (51% of equity)

Ensure leadership in our core markets: The Reframec acquisition reinforces Magnesita's leadership in its core industrial markets in South America, as it expands its services beyond the steel industry

Reframec: Leader in engineering, installation and repair services

Recent aquisitionsEnsure

leadership

in our core markets

Reframec: Leader in engineering, installation and repair servicesfor refractories used in cement production in Brazil

Closing: ~60 days. Post-close, Reframec will continue to operate independently

4

Refractory assembly in rotary kiln

-5.5%-5.5%

11.011.611.9

-7.8%-7.8%

South America

Refractory Solutions Sales - Steel

Crude Steel Production¹ (million tons) Main markets

+4.0%

-3.6%

226217234

000’ tons

Sales - Magnesita

1Q134Q121Q12

+0,5%

+0,5%

452450450

R$ Million

EU-27

80,6 %4Q12

20.7

1Q12

23.2

-8.6%-8.6%

+2.5%+2.5%

1Q13

21.2

United States1Q134Q121Q12

1Q13

452

4Q12

450

1Q12

450

4Q12

39.7

1Q12

43.9

-5.7%-5.7%

+4.3%+4.3%

1Q13

41.4

EU-27

5

Source: ¹WSA

Sales - Magnesita

Refractory Solutions Sales - Industrial

19,4%

+4.2%

+29.0%

42

33

41 101109

84

+28.8%

+7.8%

R$ million000’ tons

1Q134Q121Q12 1Q12 1Q134Q12

6

Volume (000’ tons) Gross profit and gross margin

Refractory Solutions Sales - Consolidated

Revenue (R$ million)

534

15,8%

550

18,3%

+5.0%

+1.8%+1.8%

560

19,4%

90,7%

--2.4%

+7.3%

1Q13

268

4Q12

250

1Q12

275

Volume (000’ tons) Gross profit and gross margin (R$ million; %)

84,2%

1Q12

81,7%

1Q13

80,6%

4Q12

SteelIndustrial

34.3%

4Q12

29.7%

1Q12

30.8%

1Q13

192

158170

1Q134Q121Q12 4Q121Q12 1Q13

7

+14.7%+14.7%

-28.4%-28.4%

28,8

40,3

Revenue (R$ million) Gross profit and gross margin (R$ million; %)

39.0%41.2%41.4%

Minerals and Services sales

Minerals

4,7%

1Q13

28,8

4Q121Q12

25,1

-8.6%-8.6%

Revenue (R$ million)

1Q134Q121Q12

Gross profit and gross margin (R$ million; %)

1117

10

Services

4,6%

1Q13

-8.6%

-22.4%-22.4%

36,928,6

4Q121Q12

31,3

8

1Q13

12.4%

4Q12

14.7%

1Q12

5.5%

452

4,6%

Consolidated sales (R$ million)

Consolidated

+1,8%+1,8%+1,1%+1,1%

617,9611,1606,9

PER SEGMENT

1Q134Q121Q12

6%

1Q13

5%

4Q12

5%

1Q12

PER REGION1Q134Q121Q12

10% 12% 13%6%

7%

87%

5%

5%

91%

5%4%

91%

ServicesMineralsRefractoriesOthersEuropeNorth AmericaSouth America

10%

18%

23%

49%

12%

19%

22%

47%

13%

19%

22%

47%

9

Gross profit, EBITDA and net income

Gross Profit(R$ million)

EBITDA (R$ million)

14.4%

18.8%

13.5%

33.5%

29.5%29.9%

Gross Profit(R$ million)

Net Income (R$ million)

0.0%

4.3%4.7%207

180182

26

0

28

14.4%

4Q12 1Q13

13.5%

1Q12

116

8388

1Q134Q121Q12

10

4Q12 1Q131Q12

Operational cash flow, CAPEX and Cash cycle

Cash conversion cycle¹ (in days)¹

OCF and CAPEX Cash cycle

143 143 145 139 153

67 69 68 77

65

131 131 136 139 141

79 82 78 76 77

1T12 2T12 3T12 4T12 1T13

Cash conversion cycle¹ (in days)¹

77,5

16,8

97,4

55,7

23,5

74,5

OCF

CAPEX

1Q12 2Q12 3Q12 4Q12 1Q131T12 2T12 3T12 4T12 1T13

Ciclo de caixa Fornecedores Estoques Clientes

11

¹LTM

4Q121Q12 1Q13

1Q12 2Q12 3Q12 4Q12 1Q13

Cash cycle Suppliers Inventories Clients

Debt and Leverage

Net debt / EbitdaEBITDA* LTMNet Debt

1,4x

Net debt / EbitdaEBITDA* LTMNet Debt

1.0591.0581.0311.002907

2,6x2,8x2,9x2,9x2,7x

907 1.4x1.4x1.4x

2,7x

Total Excluding Perpetual Bond

1Q134Q123Q122Q121Q12

Perpetual Bond

1Q12 1Q132Q12 4Q123Q12

*EBITDA excluding non recurring *EBITDA excluding non recurring

R$2%

-14%

907

401373357350334

566536513486

907

401373357350334

Amortization Schedule (R$ million) Net Debt per currency

2018+

1.472

20172016201520142013Mar-13

Cash

Amortization

Perpetual Bond

12

-3%

EUR

Others-2%

19%

80%

2%

13%

USD104%

Dec-12

Mar-13

678

7880621530

964

508

The Company applied, from 2013 fiscal year, IFRS 11 - "Joint Arrangements" issued in May 2011, and

included as an amendment to the text of the CPC 19 (R2) - "Joint Venture". Thus, the method of

IFRS 11 – Joint arrangement

included as an amendment to the text of the CPC 19 (R2) - "Joint Venture". Thus, the method of

proportionate consolidation is no longer permitted, the Company ceased to consolidate jointly controlled

Krosaki Magnesite Refractories LLC (United States). Additionally, from January 1st, 2013, holdings in

Krosaki Magnesite Refractories LLC (40%) are being accounted by the equity method. For comparison

purposes, the balance sheet of December 31, 2012 and March 31, 2012 were adjusted in the Quarterly

Information Form (“Formulário ITR”) considering the change of accounting practice. In the 1Q13 Earnings

Release, the Company has decided not to make changes in the quarters of 2012 to not impact the reports

and analysis already disclosed to the market.

13

Octavio Pereira Lopes CEO and IRO

Eduardo Gotilla Global Finance & IR Director

Daniel Domiciano Silva

Investor Relations contacts:

Daniel Domiciano SilvaInvestor Relations

Phone: 55 11 3152-3202/3241ri@magnesita.com

www.magnesita.com

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