4Q09 Results 11Conference Call

Macroeconomic and Steel Industry Environment

GDP – Change Rate(%) • Economies that stimulated domestic

credit are recovering more quickly;9.6 8.7 10.0 credit are recovering more quickly;

• The world economy is expected to grow by 3.9% in 2010;

5.1

0.4 0.6

0 4

4.72.7

1.0

g y ;‐0.4

‐2.5‐3.9

Brazil US EU‐27 China

*

* Estimates** Projections

•The world steel production fell by 1 330

Steel Productionmillion tonnes

2008 2009 2010 **

The world steel production fell by 8.3% in the year;

• Brazil, USA and EU-27 recorded an d f 24% ( 100 500

1,330

568

1,220

average drop of 24% per year (-100 million tonnes);• China was an exception and grew by 24% in the year

34

500

91 199

27 58 139

Brazil China US EU-27 World2by 24% in the year.

2008 2009

Source: International Monetary Fund (IMF) e World Steel Association

World Steel Production

Steel Production x Refractories Volume

Stainless Steel World Production(million tonnes)

270

320

270

320

7.4 7.4

6.3 6.0

7.1

6

7

8

9

170

220

170

220 4.9 4.8

2

3

4

5

120120

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

World Steel Production (Ex-China) - million tonnes

Refractories Sales - thousand tonnes

0

1

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09

The world crude steel production is expected to grow by about 10% in 2010 in relation to 2009;The world crude steel production is expected to grow by about 10% in 2010 in relation to 2009;The world crude steel production is expected to grow by about 10% in 2010 in relation to 2009;

Expansion projects show an increase by about 15% in the Brazilian crude steel production capacity in

2010.

The world crude steel production is expected to grow by about 10% in 2010 in relation to 2009;

Expansion projects show an increase by about 15% in the Brazilian crude steel production capacity in

2010.

Source: World Steel Association and International Stainless Steel

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2009 Highlights

31 3% (R$ 644 million)• Capital increase 31.3% (R$ 644 million)drop in net debt

in 2009

• Capital increase• Debt renegotiation• Rating upgrade

Debt

R i Recovery in EBITDA Margin

(6.2% -> 25.8%)

• Restructuring• Inventory reduction• Identification and use of synergies • Improvement of processes

Optimization of operations

• Improvement of processes

Larger Market ShareAddition of Value

• Expansion both domestically and abroad

• Major steel industry players CPP model

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Business Model Expansion - CPP

CPP x volume New Contracts

BRAZIL• Votorantim - Resende• Votorantim - Barra Mansa• Usiminas – Ipatinga• Gerdau – Pindamonhagabay

Volume73%

Gerdau Pindamonhagaba

USA• Gerdau - Jackson• Gerdau - Jacksonville

Gerda Kno illeoppo

rtuni

tyCPP

• Gerdau - Knoxville• Gerdau – Midlothian• ArcelorMittal - Georgetown• Gerdau – Charlotte

o27% CHILE

• Gerdau – Asa

UK• SteetleySteetley

Focus on solutions • Long-term partnerships • Growth opportunities

5

Focus on solutions Long term partnerships Growth opportunities

Brazil/Other countries • Companies outside of the steel industry

4Q09 Highlights

Net Revenue(R$ million)

Refractories Volume(thousand tonnes)

219 9238.7

565.0

483.6 537.7 

150 1 161 1

62.2 69.8 77.6 203.2 219.9

+11.2%

141.0 150.1 161.1 

4Q08 3Q09 4Q09

EBITDA$ ll

EBITDA Margin – 4Q09%

4Q08 3Q09 4Q09Exports Market Domestic Market

(R$ million) (%)

110.1138.8 

25.8 

35.1

110.1 

+26.1%

22.9 

64Q08 3Q09 4Q09

Recorded Adjusted (pro‐forma data and unaudited)

Economic and Financial Performance

183 6

Gross profit(R$ million)

Net revenue(R$ million)

179.2

129.3144.2

169.7 183.6

31 7 31 835.1 34.1

35

40

45

50

100

150

200565.0

451.0 454.2 483.6537.7

31.728.7

31.8

25

30

35

0

50

4Q08 1Q09 2Q09 3Q09 4Q094Q08 1Q09 2Q09 3Q09 4Q09 Gross Profit Gross Margin %4Q08 1Q09 2Q09 3Q09 4Q09

EBITDA(R$ million)

Net debt(R$ million)

71 6

110.1

138.8

22 8 25.8 29 5

41,5100

150 2,059 2,1041,919

35.1 44.471.6

6.2 9.915.8

22.8 25.8

5,5

17,5

29,5

0

501,434 1,415

4Q08 1Q09 2Q09 3Q09 4Q09EBITDA EBITDA Margin %

12/31/08 03/31/09 06/30/09 09/30/09 12/31/09

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Net Revenue Breakdown

Revenue by Product– 4Q09(%)

Refractories Sales(thousand tonnes)

238 7

Basic Magnesia

35.2%Non Basic22.4%

Others11.1%

161 1

62.2 52.9 57.869.8 77.6 

203.2180.8 191.0

219.9238.7

Basic Dolomitic

31.3%

141.0 127.9 133.2 150.1 161.1 

4Q08 1Q09 2Q09 3Q09 4Q09

Revenue by Operating Location x Costumer Location – 4Q09 (%)

Refractory Revenue by Industry 4Q09 (%)

Exports Market Domestic Market

Q ( ) 4Q09 (%)

58.0 

23.9 

54.8

20 9Steel88.7%

Cement

Others2.5%

14.5 3.7 

11.020.9

11.12.1

South America

North America

Europe Asia Others

8

8.8%America America

Operating Location Customer Location

MAGG3 2009

Stock Performance2009 35.0250

20.0

25.0

30.0

150

200

million

09 = 100

10.0

15.0

20.0

50

100

Volume ‐

R$ 

01/02/200

0.0

5.0

0

50

Financial Volume MAGG3 Ibovespa

109.7% appreciation in 2009, 27 p.p. above the Ibovespa index;

R$ 6.9 million daily average trading volume in 4Q09 and R$ 4.2 million in 2009;

109.7% appreciation in 2009, 27 p.p. above the Ibovespa index;

R$ 6.9 million daily average trading volume in 4Q09 and R$ 4.2 million in 2009;

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Coverage by major banks: Itaú, Credit Suisse, BTG Pactual, Barclays and Santander.Coverage by major banks: Itaú, Credit Suisse, BTG Pactual, Barclays and Santander.

Thiago Emanuel Rodriguesg gCFO and Investor Relations Officer

Adriana Fernandes LanaIR ManagerIR ManagerPhone: (+55 31) 3368-1069

Lucas Lima FerreiraIR AnalystPhone: (+55 31) 3368-1068

ri@magnesita.com.br www.magnesita.com.br

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