CSN Mineração S.A. (CMIN3) Earnings Call Transcript & Summary

[Audio Gap] To investors at that time, we had only the CFO speaking. Now, we have a full floor with all of the important executives of the group and this was simply a message to shareholders on recent results and the near future. Within CSN, this has begun to be the end of a cycle of our budgeting cycle, our strategic planning that takes the entire path of the year, and it's something that permeates all of our business. And we would like to share this with the outside audience, especially investors and analysts, but also with our in-house audience, which is a great client for these messages. We have a very challenging agenda today in terms of the topics we would like to cover. We would like to cover the agenda in 2 hours. We know that you are all very busy. We are in December after all, and I will begin here as the master of ceremony as a marketing person. I wanted to have Juliana [indiscernible] here, but we did not have enough budget for this. So I will introduce our CEO and Chairman, Benjamin Steinbruch, for his initial remarks. Once again, thank you all very much.

Good morning to all of you, and thank you for attending our CSN Day. I have already requested additional chairs. Of course, you can sit wherever you find some space close to the door so that we can comfortably see everybody. We're going to attempt to finish this presentation in 2 hours and allow 1 hour for question and answers, allowing all of you the opportunity to speak. It is important for all of you to become aware of what each executive does, and you will hear this during the presentation. I will very quickly begin my initial address, and then we will speak about each different sector of the company. Let's begin with the year 2023, a year of great achievement despite all the difficulties we faced in mining. A record production and purchases as well, attaining 42.5 million tonnes. We had 3.9 billion in terms of payout of dividend and an appreciation of our stock of 69%. In steel, we have heavy investments into -- we are building a new plant at Presidente Vargas within the old steel mill and these investments are significant, not only in terms of amount, but also in terms of quality and environmental issues. Presently, we have the capacity for 3 billion 800 thousand tonnes. And ensuing all of these investments, we will resume our original investment, which was of 5 billion tonnes. Therefore, these investments are geared not only to refurbish the equipment to comply with environmental standards and to resume with a full production eliminating bottlenecks, which is our goal, and we have already produced 5 million tonnes. We have 19% of our production in green steel. The entire production from Germany is deemed to be green steel. We have 0.2 carbon per steel ton when the standard is 0.6. Therefore, the entire production in Germany is deemed to be greenfield and we were able to begin to internationalize our program. We have an exchange program through which we take our associates to United States and Europe. We were able to do this with 50, and we will work with an additional 50 this year with a fixed number of associates in United States, Germany and Portugal as well. When it comes to cement, we are already the second largest player in Brazil, something that, of course, fills us with pride, a decade ago, we were significant. We began very silly in a primary fashion, making the best of our blast furnaces and from there, we reached the second ranking in terms of production for cement. Now the integration with [indiscernible] housing has been concluded with gains of over BRL 500 million annualized regarding EBITDA, and there's a great deal more left to do. We had 15 million tonnes of cement sold. That is to say an additional 7% vis-a-vis the market. In Peru, the market was very tight. And despite this, we were able to increase our production by 7%. In energy, we are among the largest generators in the country. We have 2.1 gigawatts which enables us the tranquility to be considered to producers if we have any expansion, and we're going to transform energy into 1 of the main businesses, and it will be 1 of the main pillars for the future of the company. We have clean energy, all of our energy is renewable and we had an EBITDA of BRL 584 million annualized, basically due to a cost reduction in generation for CEEE and all of the rest of our units. All of it led to a reduction of 43%, therefore, in the CEEE. Now, new businesses which is something I referred to some time ago that CSN is like the hat of a magician, enabling us to build new businesses constantly. We have the first example of the CBSA that began very timidly working with maintenance of bargaining and the painting of our units. It gained value. It increased the quality and quantity of services it carried out and nowadays, we are servicing not only CSN, but also significantly large companies with more complex work. We also work in maintenance of the equipment of CSN, not only for mining, but also for the steel and cement plants. Last year, we had a profit of BRL 600 million. This year, we will easily jump to BRL 1 billion. We have the agricultural line, which is our entry into the agri business sector. We truly believe in this sector and the verticalization of logistics. We have another large business for logistics and the consumption internally of logistics services at CSN is enormous when it comes to highway transportation, railroad transportation and maritime transportation. If you analyze the figures of CSN, you will observe it represents more than BRL 1.5 billion. We are developing -- developing this cautiously. We have bought horses and carts to enable us to begin this work. But our goal, of course, is to fully develop the potential that we have, ensuring that logistics will become a big business for CSN. We have other opportunities that we foresee when it comes to real estate. And additional areas, which means we have several fronts that we're going to work on as part of the business that we run and the idea is to transform all of these into significantly and large businesses, all link to CSN. And subsequently, we will be working with the market. Now to end this first slide to the right, you see CSN3 with an appreciation of 18% with a payment or payout of 13% of dividends and 31% of appreciation in November and Cement with an appreciation of 69% and a payout of dividends of 17% and general appreciation of 86%. These figures are highly important and they point to the fact that we are now adopting. To speak about steel basically for 2024, we will have a resumption of domestic activity and the resurgence of international prices. We hope to have good news in the steel area in 2024. We face difficulty [indiscernible] news in 2023, something that we already expected as part of what we had to face, nothing was unknown to us, but in truth, there was a convergence of these problems creating a hurricane inside of our steel plant. Now despite the willingness and the speed to resolve these difficulties in the steel plants as well as in mining and cement, we're working with very large parts and equipment, they demand very long delivery time. And of course, this delayed everything due to the supply of spare parts and the equipment per se. So we're fully aware of everything that we have to carry out. We truly believe in normalization beginning in January with production returning to normalty. Of course, this is a progressive process. We're convinced that we will be able to reduce costs, increase amounts and enhance the quality in the steel plant. When it comes to mining, we had this significant process here, and we're going to continue on strongly, growing production, maintaining purchases from abroad and perhaps in a more selective way to allow for an increase in profitability, which was significant between 2022 and 2023. It should improve in 2024. Mining, therefore, is on a very positive promising path compared to steel because of the difficulties that we faced. Notwithstanding this, we truly believe that our steel plant will have a better performance in 2024. In cement, we had a good year. We obtained 3 million tonnes, expressive figure. We had good margins. We also increased our market share. We're investing heavily in related sectors such as concrete, logistics and other sectors and agricultural lime and we hope to have very good results and to increase the amounts that we produce and [indiscernible]. Speaking about operational excellence. This is what we attempt to do. This is what we should do and reduce costs. The market prices, the sale prices. We're not the ones that control this. Now the cost, yes, therefore, we're focusing on costs. We're going to continue to focus on cost. We would like to be a low-cost producer and we're seeking this through the investments that we're making in all of the sectors of our activity. We believe that we will reach our goals. Now expansion and -- in the presentation, you will observe, we have a highly aggressive investment plan. We have a high new diversified plan with excellent figures. We need to choose and prove whatever will give us a greater return. All of our projects are good. And every time we diversify and move forward, we have greater opportunities for advancement and we do have a commitment with the market of having a leverage below 2x net debt EBITDA. This is one of our priority focuses as part of the heavy investment plan that we have set forth. And because of our options, we're focusing on this. We do have the commitment and we will deliver that as well as the payout of dividends. Let's speak about the vision for the future. I'll be touching upon something that I'm sure will be of your interest in terms of questions and comments that you may have about the moment we're now going through. I think we'll go after operating excellence, and I'm sure we can deliver it and also add value and going global also. Not only that, from the point of view of in practical terms and giving a bit of a spoiler in terms of technical figures, the Brazilian market is of about 25 million tonnes. We are now importing 5 million tonnes of steel, 5 million tonnes of products with added value. Our own production reaches 30 million tons, and we export 12 million tonnes. So basically, that's the makeup of tonnage in Brazil. In terms of taxation of imports as of January 1, a criteria that you'll define from 10% to 16% of taxes on imports and other countries, both countries in the European community and the U.S. and also Mexico and Canada. We're talking about 25% import tax for everyone across the board. So -- so it's like challenging the law of gravity. If Europe, if the U.S., Mexico and Canada, if they are levying 25% of taxes on us, why are we levying only 10% on them? Why? So when you export 10 million tonnes, 5 million of steel and 5 million of added value products, 68% imports rather, sorry, imports -- 68% comes from China. So we import from China 6.8 million tonnes. And Brazil is quite concerned, quite scared of discussing steel matters with China. Now I'll provide you with some numbers. Brazil should not be scared of negotiating with China around steel. China produces 1 billion 50 million tonnes of steel. That's the figure, 1 billion and 50 million tonnes of steel. We produce 30 million, 3-0, 30 million. Just to give you a better idea, The consumption of ore in China is about 1.3 billion tonnes internally, 175 million and they import 1,198 million tonnes. Iron ore imports for China, 1.198 billion tonnes, out of which 246 million tonnes from Brazil, 246 million and 788 million tonnes from Australia. And my question is a country producing 1.15 billion tonnes, 7 million, will that make a difference to them. That's what the export to Brazil. Does that make a difference to them. It's like nothing, 0. If you think about our relationship with China around protein and ore, it's simply a matter of sitting around the table, discussing it and bringing opportunities to Brazil across other markets and also helping us preserve our internal market. So it was clear that the Brazilian government should have the courage, the stamina to sit with Chinese and negotiate only 7 million tonnes out of a vast universe of 1 billion tonnes. So it makes no sense after all, the government will need to do something urgently around that. We have several steel companies halting their production because there is no market and because of this unequal competition, it makes no sense. So we need the government to act fast to address that, and that will allow us also to organize the market internally. So I'd like just to make this clear. When we talk about imports, we're talking about 7 million on the one hand and 1 billion on the other. It makes no sense to destroy Brazilian production just because we do want -- do not want to sit down to China and discuss different terms. And we do not want anything out of the world -- of this world, we export, of course, export 12 million tonnes of steel. We're talking about steel sheets or more than half are steel sheets. And when we export added value products, we paid 25% as a reminder to all those places I mentioned. Why do they only pay 10% to 16%. That's the only question, equal treatment across the board, that would be only fair, and we are lagging behind in terms of discussing that with China. A final issue I'd like to raise before we move on. You will see throughout the morning here that we have a very firm commitment in terms of investments, organic investments and sequential investments as well. In other words, as we start, we need to finish. And we have already started the P15 for example, heavy investment that we have, we have already started it. We are now about 25% contracted and already receiving equipment. And when we start, as I said, we need to finish, just as for the rest of our activities, furnaces and heavy industry components. So if you're telling us you're going to maintain leverage, you're going to pay out dividends. Where is that money coming from? Well, we have the operating front. You will have a chance to see the flow, and we have a chance to analyze the situation and talk to us from the operating point of view, what we have to comply with those investment needs, and also things which are already known, but it's something I'd like to emphasize. We have, for example, 200 million pellet feed. We already have 200 million tonnes extracted and we'll close the year with 300 million tonnes. I'm just waiting P15 to be ready to start processing it. We're talking about real ore, quality ore, which has been extracted and is just waiting for the new plant to be up and running. And as we changed the mine, characteristics we need to change, the production line characteristics as well. And this can be monetized through partnerships or organically. We decided to invite partners to share the burden with us. It's not a complicated process. It's a mere filtering process and it's quite assured because the ore is already there. So we do believe there might be third parties interested and expediting the process, and that will require less capital on our side. As for them dealings, we have 200 million tons of rich ore richer than the ones that came from 60, 50 years ago and this gives us 125 million tons of rich ore because of those dam residues. So it's 400 million tonnes, but actually 225 million half of ore, which has already been extracted, and part of it will be recovered and part of which will be processed. Within our internal policy, as mentioned before, our ideas as we move forward and become stronger across other lines of business, we'll remove it from CSN, go public and build independent pillars. In principle, we have 5 of those steel, mining, cement, infrastructure and logistics and energy. So as we have reached enough numbers, enough results and the right size, we will spin them off CSN and list them in the stock exchange. So they will become independent autonomous business so that they can grow in a productive way within the potential that they have. So we have cement, which will be probably the next one to be spun off. Irrespective of organic growth, as you know, we have 2 plants for cement, and we may acquire another company. Still, the idea is to offer a large and unique type of business in the cement industry to offer that to the market. And we are sure that we are already in place to do that now. And along with those 2 units that we already have other opportunities that may come up in the market. We are well positioned to offer a promising business to the market. The same goes for the steel industry. We intend to make an IPO for the steel arm of the company as soon as we have more clarity of the investment situation of the production ramp-up in better numbers. We will go to market and also offer our steel arm as an independent business. The same goes for energy. We have the possibility which was actually our first interest to reach out to a strategic partner. Unfortunately, our partner gave up, but the idea, the intention remains. We want to grow our energy business and either promote an IPO or bring about a strategic partner for us to be able to have a promising prosperous business around clean energy produced in Brazil. In addition to that, just so you know where our resources are coming from. And we do have this commitment of deleveraging the company and also to paying out dividends. Today, we own 80% of cement. The idea is to have control, but not necessarily have higher share. So the market by today is USD 8 billion. If you consider 30% that we would have -- on our side, you're talking about BRL 2.5 billion, a normal market operation that would allow us, along with the operating results that would be able -- that would allow us to face any challenges concerning either investments or market constellations. Just as we have Usiminas stock in our hands. Strategically, that stock is not part of our strategy, but we are waiting for a sentencing from the court related to tagalong options and then decide what to do with the shares from Usiminas. The Usiminas controllers have already decided what to do irrespective of the court decision. But that's something we can also use to offset investments or any sudden market change. We can do that if that's the case. So basically, that's what I had, as opening remarks. We are quite aware of our situation. We are quite committed with everything that has been said up to date in terms of quality growing, in terms of the deleveraging, in terms of dividend payout plans. And we also see a slow drop in the payout, just to fund those investments, but nothing major, well thought of -- so it won't be really interfere in our larger assumptions. And just to emphasize, we do have an opportunity to grow ahead of us, not only across the assets we already own, but across other verticals that will be addressed this morning. All of that allows us to pick and choose the best alternatives in terms of returns. I'd like to thank you all once again for being here -- both here and remotely, and thank you all who worked to organize this CSN Day. I know it's hard work for us to be able to have a quality event. Also, thank you, [indiscernible] and her team. They work tirelessly overnight, I know, to make this happening. Those last 3 days have been hectic to get this up and running. So thank you. Also, Carolina, who is here; Ricardo, my brother, who is also here with us today. So all of you. So this is the day where we share some joy despite challenges of 2023. And of course, the challenges we have ahead for 2024, but this is also a celebration day and we are happy to realize the potential that we have to move forward in terms of opportunities. Again, I repeat, despite all the difficulties we have in Brazil, we have huge growth opportunities. And now as we also try to go global, Filipe is in New York, and we'll be talking to us from New York to talk about CSN Innova. Another important investment and other important business pillar for us to develop our own technologies in ESG, okay? So that's what I have. To start, and I will turn the floor over to Alberto Senna, who'll be talking about CBSI, one of our may hopeful for the future have reached BRL 1 billion this year, should exceed BRL 1 billion next year. So thank you very much.

[Foreign Language] Good morning. My name is Alberto Senna. I'm the Director of CBSI. I had a chance of being here last year for the CSN Day. And if you're here, you will remember our Chairman, talking about the several opportunities that the group had back then and also a strategy that we called BRL 1 billion companies, as we called it back then. I am glad to be here today to present to the market the first case coming out of that strategy. CBSI is a company for Industrial Services, a company that has been getting ready to service several industry segments, providing quality services across different areas, as you will see in a moment. The company today within the CSN Group has already provided a savings of BRL 200 million. Those savings are measured by the price. CBSI provides that service within the group vis-a-vis the difference of the second biller. So even though it is a company that belongs to the group, the CBSI participates in the bidding process is just like any other external company. And that's a way to keep the company competitive. So in addition to those BRL 200 million in savings, we do have our own results, which have been improving year-on-year with investments that have been made also. Our portfolio, as Mr. Steinbruch said earlier today, our portfolio has been changing throughout time in 2021. We had 37% of share and facility contract. In 2024, we expect a drop to 19%. At the same time, we have moved from zero share to something close to 25% and refractory segments where very few companies in Brazil operate today, only 2 actually do that in Brazil. They do repair coking structures. So we become very quickly one of the first and most important players in this segment. Another important segment, we work in is in electromechanic maintenance services. In 2024, we expect to reach 34% of share around electromechanic maintenance services. And our game is not only financial, we also have a quality gain, which is quite important to mention today. CBSI provides quality service to the group, We have been acknowledged by other engineering companies abroad as an excellent player in the refractory scenario. And evidence of that is that we have participated and won bidding processes, both inside and outside the company. Recently, we put together a lamination chair at a steel company in the south of Brazil. We are now operating in several port terminals in Brazil, providing important services of industrial banking for the preservation of those terminals. And year-on-year, we have been increasing our share in external contracts. It shows that we are competitive, that we deliver quality services and that we are on the right track. You can see our growth from 2021 to 2023, where we have increased threefold. We reached BRL 1 billion profit with a net revenue of BRL 200 billion and [indiscernible] strategy of seeking segments with higher added value with material that is deemed to be a better quality and the number of headcount, which is important and service companies has not accompanied the revenues. We have increased the revenues proportionally much more than we have improved head count and things don't stop here. The company is focused on supporting the CSN Group in investments and CapEx. All of this will be presented by my colleagues during this event. Well, we have also increased our client portfolio outside of the group, and we have mapped out a pipeline of possible partnerships and M&As to enter new segments for in-house to work with expertise that will make a difference for the group. Now CBSI is the first case of the many opportunities we have of unharnessing value. This is a very sound opportunity for us. Thank you very much.

I'm going to need more time, Mr. Chairman. A good day to all of you. It is a pleasure to speak more about our ESG journey. I will try to be brief just by the 15 slides I have. We're going to show you our new materiality matrix and good practices state that this should be done every 2 years, and we have done that. The great novelty refers to human rights that has become ever more relevant because of the expansion, especially of cement. All the other systems remain the same. Their governance is established by the ESG governance. We have projects that are being accelerated through CSN Inova. And once again, we report using the most important market framework. Now to speak about risk management, which is the main risk to our company, climate risk. In 2023, we can test the climate risks and others in a single matrix. This enables us to map out risks and opportunities for each segment. Speaking about the impact and the dependency of our operation in ecosystem, this allows the company to truly understand the resiliency of the business vis-a-vis, the challenges caused by global warming and to create practices to fight against each of these and to integrate this in our decision-making process. We had divided our governance in the 3 main pillars, mitigation, engagement with shareholders and others. Now in terms of mitigation, during 2023, we attempted to integrate all of our new assets especially those of cement. They have high carbon emissions. We have created a new road map for Cement. And this month, we can submit our new goals to the initiative. Now cement represent 45% of the emissions of the CSN Group as a whole, something that is very relevant. We hope to have our goals approved by the space target, and we want to have goals aligned with the limitation of increase in temperature of 1.5 degrees. Now in cement. We represent a benchmark in Brazil. We have the lowest emission of CO2 per ton of cement produced. For the year of integration, we have reached 2000 CTUs reported, a pipeline of projects so that we can reach this new goal of a 23% reduction of emissions up to 2030. This goal has been submitted now in December of 2023, and we're fully convinced that it will be accepted. And in 2030, we will begin working with the goal that we have set forth for 2050, with an advance of 20 years. All of this through several projects that were developed alongside CSN Inova and other partnerships using green hydrogen to stabilize our furnaces, knowledge is that increase our operational efficiency and that in 2024, will be replicated to other units, enabling us to comply with our goal in 2030. In steel, we ended 2023 with 19% of our production classified as green steel, a very low carbon intensity, perhaps one of the lowest in the world. We continue our decarbonization and Presidente Vargas, especially with the coke batteries that are important when it comes to the emissions of CO2. And in 2024, with projects of this sort, led by CSN Inova, we hope to achieve our goals. We have used some pioneer projects in the steel mine in 2024. And in the study, to seek technological enhancements in Presidente Vargas with the focus on decarbonizing, we hope to capture 5% to 10% of the greenhouse gas emissions and enhance our process. And of course, this will have an impact on the steel plant cost in general. Now the decarbonization of mining goes through the fleet. We end this test with 2 electric 60-tonne trucks this year with a performance 30% better than the combustion trucks. We are acquiring more of these trucks for 2024 and the gradual replacement of these trucks with electrical trucks. As we have renewable energy, we also have a reduction of 9% between 2022 and 2023 because of operating efficiency. A reduction in the use of diesel with a positive impact -- this will enable us to comply the goal in 2035. Another goal that extends to 2024, thanks to CSN Inova, we're going to work with cold treatment of our iron ore, which is very important in the Presidente Vargas plant, and we also will be producing pellet through the P15 project with a strategic role in the decarbonizing of the global work. Now this [indiscernible], I believe Pedro will refer to this further ahead, simply so that you can understand the dimension this iron ore when used with a worldwide average factor, the 15.5 million tonnes that we will produce will reduce 10 million tonnes of CO2 per year in these plants, which is more than all of the emissions of the Presidente Vargas plant during a year. And as Pedro will mention, we're working with a joint venture with a Japanese and this reduction could reach 70% compared with the blast furnaces. We have plans to expand production. We also have investments approved to work with a solar park, which means that in the near future soon as we have the hydrogen available, we could be considered net zero in terms of carbon. Now in cement, although the average emissions we have are lower than the rest of Brazil, we also have a product that is geared to large sustainable work with a very low carbon footprint, it also uses less water, more coprocessing. We tend to say that our cement is green, although the bag holding it is red. It will be produced in other plants seeking a specific niche and sustainable and premium construction. And finally, we want to capture the synergy in terms of energy. We have 150 potential megas for 2024. This amount should increase as of the coming into operation of the Floriano project, an enormous project for solar energy, perhaps one of the largest in the country. It is in a stage of licensing in the state of [indiscernible]. Now to speak about other topics going beyond carbon, something that refers more to biodiversity. According to the World Economic Forum is the fourth major risks for the world and water management, of course, is fundamental for our business. Every year, I show you our KPIs, we have reached a reduction of 30% in water consumption in the last 3 years. We also had better rainfall. We were able to make the best use [indiscernible] water in our processes. And as part of this study, we have worked with a very detailed study of our water footprint to work in a more efficient way in the process. We have more than 90,000 hectares of preserved areas. They're monitored in terms of their biodiversity, their wealth and the positive and negative impact that we generate in those areas. Now, we have made of our paying a significant business. Last year, we invoiced BRL 216 million in special sales and coal products and scrap. This is part of our DNA already. And of course, the heavy investment that we're making in the Presidente Vargas plant, is geared to improving control. This represents BRL 16 million invested in maintenance, repair and repairing the filters for sintering, which is, of course, a problem in terms of particulates in Volta Redonda. The community has perceived an improvement and we also have an increase in the monitoring network in the city. It is the third largest monitoring network in the country, only in third place after Sao Paulo and Brazil and this enables us to work preventively. Now to speak about the security, we have reached our lower accident rate in the last few years, a highly important result with a reduction since 2014. This includes all types of accidents with or without leave, impact on third parties. We have had 10 years without accident that they need all of this, thanks to investments in technology, training, the engagement of our leaders. We know that we can celebrate safety. In this context, we still live day to day with potential serious accidents. And because of this, we have created a program for 2024 focusing on high potential risk enhancing the part of process safety. And we also have a program that was launched this week with the participation of directors to prevent fatalities and high risk potential accidents in all areas. I am coming to the end, Mr. Chairman, I have only 3 slides more. We have made strides in terms of our diversity. Last year, I said we were 5,000. We are now 5,610 as of October. We must mean more than that 6,342 women, a growth of 87% since we've set forth the goal in 2020. In 2024, we will have increased the number of women twofold. We're working more with people, with the capacities with black people. And if I'm not mistaken, CSM has 50% of ratio represents [indiscernible] in the company with an increase of 24% and leadership position in CSM Cement. We have several women in leadership as well as programs that were awarded and that have come, thanks to a very powerful program to improve performance such as the [indiscernible] initiative. Now the project of our foundation, I would take the entire presentation to speak about this, the foundation has existed for 62 years. And the highlights are the new units of what we call [indiscernible] more than 1,000 children, 5,500 youngsters only for the year 2023. For those who are interested in this, please read our impact report for CSM that was published this year. It will refer to all of the changes in the foundation as well as the investments. Now when it comes to social action going beyond the foundation, we have something in the state of [indiscernible]. Our first project for inclusive work impacting more than 100 families. We're creating production change for honey, for organic cotton changing the life of that community and also working with a railroad that crosses that community. And because of the changes we have made, we have created a specific area for social innovation. We're creating action plans to mitigate the risk when it comes to our expansion, especially with cement. In governance, of course, we have worked with projects that enable us to understand what is critical in terms of our suppliers. And the next step would be to include everybody in an ESG matrix to mitigate risk, but we've also become more engaged with our partners to develop new products and new technologies. This has been the year for our first operation in sustainable finance. We closed a [indiscernible] 500 million credit line. And in 2024, this should lead to additional financing. Now this slide summarizes my entire presentation. CSN is finally in the place that it deserves among it's peers when it comes to its ESG rating. CSN and Cement are among the [indiscernible] ranking. We have CSN in the 9th place, CMIN in the 6th place, and [indiscernible], Analytics which is a global report in S&P Global in 2023, we were the only company in steel mining and civil construction segment to be elected for the global year book and this is part of the Dow Jones Index. We were also awarded with the deal of industry mover because of the evolution of our ESG practices worldwide. Finally, we are in the space where we should have been for some time already. What was important was to be able to share this. The challenge now is to remain there, continue to move forward and deliver ever more value to our shareholders and to society.

You took 20 minutes, 20 minutes, not to raise false expectations and also to avoid fake marketing actions out of those 8 things that I mentioned relative to a potential deleveraging of the company and a potential sale of 30% of CMIN, which totals BRL 12 billion. I do not want to sell it. I do not want to demobilize anything. Just for you to know that the possibility is there on the table that we may have an excess of assets that can be monetized if the case be, if we are allowed to do things faster than we can. So I remain the same. I do not want to sell anything, it's just a possibility, right, just to be sure.

Good morning. We will now have Felipe is coming to us online from New York. He's going to be talking about CSN Inova. By the way, nobody thought we wanted to sell anything, right? Just to be sure, rest assured, nobody thought that.

Good morning, everyone. Can you hear me? Okay. Let's get started. And Well, I'd like to thank Helena as usual for her partnership. My name is Felipe Steinbruch. I am the Head of CSN Inova. It's a pleasure to be here with you all once again to talk about CSN Inova, talk about this year and look ahead for '24. So picking up where our president left off, our commitment to going global. I'm not going to be talking about -- I'm talking from New York as it was mentioned from our office in New York, and we are very much involved in this business in technology and other strategic areas to help the company support, the company in its growth path around the world. Next, please. Just as a recap, you've seen this before, I showed this last year, we created this innovation platform back in 2018. We have 4 complementary tools, which are used to support the group in an active and strategic manner. We're talking about CSN Inova Open Tech Ventures and Bridge. And it's through them that we seek out innovative solutions for our main strategic challenges. Next, please. The main takeaway here from this slide is that we're able to create a systematic straightforward way of prioritizing our objectives. And as Helena mentioned, this is a living organism which reaffirms our commitment as a group with ESG issues. So prioritize and use innovation solutions to address those strategic challenges. And as you can see, those challenges are real material objective. In other words, objectives linked to our everyday operations. We are quite focused on the group's core business, looking at today so that we can improve tomorrow. So these challenges, to some extent, reflect the way we have identified today's industry standards or patterns without forgetting about tomorrow. We have challenges around new materials, which are always challenging us to look at new trends in the market, what's going to happen across different segments in the coming 50 years, if you will. Just as we have first challenge in terms of reducing fossil fuel consumption and energy use. That's something we do today, of course, but something that will have a short-term impact. And we do that through our open methodology, focused 100% around pilots. Pilots are our raw material, if you will max please? Unlike the past 2 years, as we mature the company, we're now ready to start showing more detail of our numbers, our figures. So the idea is to be able to create new business and then be able to spin off those new business, use the group as a lever, just has happened with CBSI. So from left to right, the main figures I can share with you today in terms of the breakdown of our businesses. And of course, that shows how flexible we are, how flexible our methodology is. We are able to operate across all the business of the group. It could be corporate, could be mining, steel or cement, our methodology works and can be used across the board with a very positive impact in all segments. That, of course, goes to the fact that -- because we are in close contact with those 5 segments of the Brazilian industry. Today, we can easily find those industry patterns. If it works within CSN, it will very likely work in any other company in this industry or in any other industry. So that's a way for us to prepare CSN Inova to gain scale in the future. Now if you look at the chart in the middle of the slide, our portfolio maturity. That increase of initiatives from 55 to 73, as you can see on the slide, in 1 year, that shows how we have been able to scale up our business, how have matured through time. In addition to that, it's noteworthy our commitment with innovation and excellence, which can be seen in the increase in our team. We moved from 2 people in 2018 to close to 40 people today, 2023. That shows, of course, the growth of Inova as a department, as a platform, but also reflects a larger portfolio. We have more people dedicated to innovation across all segments, which, of course, leads to a broader portfolio. The main thing here is to say that for the coming years, we will be totally focused on successful growing the business. Our focus as an innovation platform will be to scale up our methodology across the whole CSN Group, just as we did for some of those first projects, starting in 2029 and all the way through 2023 add up to an impact of a little over BRL 400 million. And when I say impact, I actually have 3 main underlying pillars. Number one, savings. Most of those projects allowed us to have a very significant impact in terms of savings for specific areas or specific segments. Provided we bring about good solutions, plugged them into the group. So that will lead to savings. So saving is number one. Number two, an increase to a new revenue line, an existing revenue line. We simply expand this revenue line. And then number three, the most desired for us as we look forward, new revenue streams and that's quite clear in our president's speech [indiscernible] Helena, when we look forward to the future as a platform, we want to use the group first early on to benefit the group, but then create businesses that can be spun off later, reaching that magical number of 1 billion, right? But it's also worth mentioning, I'm going to give you 3 quick examples of businesses. Number one, hydrogen for fossil fuel reduction in cement kilns, as mentioned by Helena. Very nice project we did with our cement area from Edvaldo's team and a Portuguese company called [indiscernible], our partner we start in [indiscernible] containers and Arcos and through electrolysis process, those containers that are placed by the furnaces, they inject small amounts of green hydrogen in our combustion processes, and we had 3 immediate and wonderful impacts, number one, a reduction in natural gas consumption, which causes savings, of course. Number two, a decrease in CO2 emissions, also quite significant. And number three, an increase in productivity. So in addition to those 2, we also increased our productivity move from 4 containers in 2021 to 10 containers today installed and running with a huge potential to be scaled up. And we also explored this partnership with Ulis, and we are now trying to adapt that to the steel company as a whole, may be contemplating furnaces starting in December. So if that works, it's going to be very interesting for us. Project #2, which is worth mentioning, draining or drainage equipment. You know that humidity for iron ore is a huge challenge that we have to mitigate humidity content in iron ore to be able to move that raw material humidity is a problem. And also the cost of freight because you have higher weight when you have high humidity. So that drainage system is also very promising. And it's a project, we believe, has a huge potential for mining. In closing for this slide, a third example that shows the flexibility we have reached is that [indiscernible] Bank, the last one as a group, we have always tried to benefit from that law. [indiscernible] the first year, we reached a figure close to BRL 12 million to BRL 30 million. And we were able to reach that number for the first time. Also, we are constantly looking for alternative funding lines. So I'd like to share with you that in 2020, we got funding with FinApp. In addition to serving us also served the cement area. So we continue with FinApp, BNDES, trying those alternative funding lines geared towards innovation. So in summary, we started with low hanging fruit. As you can say, we focus on savings, but then as a next wave for the company, our focus will be on new businesses on generating new revenue streams and also being able to build an independent business. Next, please. Well, speaking a bit of our portfolio now, as you saw, we have our 4 pillars. One of them is our fund or CVC. Today, we have 9 invested companies, out of which 7 are part of our group or work with us through our open methodology platform. I'd like to highlight those fleet, something we closed -- business deal, we closed now in the second half, they digitalize and improve internal logistics. It's working at Presidente Vargas today, we are scaling up, and those fleet represents a new moment for the fund, which will be to focus on investments. You pay more relevant share and more active participation around solutions for the short to the midterm. We're going to continue to look in the long run as well. Two of those companies work with green hydrogen and graphine, but this shared value is very much based on the possibility of bringing solutions, some startups, plugging those solutions into our platform, scale that up and then you help those entrepreneurs to test, pilot those solutions, and then they can take that to the market along with us. So that share value is very important, and that sets CDC apart from other investment vehicles. So we are quite committed for the next 2 years in increasing our portfolio this way with a focus on companies that have synergy, technological maturity, of course, always with an eye at long-term possibilities. Next, please. In closing, I think we are quite committed. Our ambition is to be the sixth segment of the CSN Group since we were created. That's what we have been looking for. The process is quite clear now. There is nothing else to move. It's a matter of scaling it up. And it will happen in 3 phases: Having successful pilots. Those pilots will be then scaled up within the group. And those successful steps once you have established once you have had the impact, we can't spin them off in 3 ways. Number one, to have an internal development, create a new area that has happened before or we could perhaps create a joint venture with a third body partner. And the third avenue for that would be through CVC our fund, bringing those solutions inside, expanding them in-house and then helping them take solutions to the market. Today, we have 3 spin-offs that were created in-house. Number one, [indiscernible] was done internally along with the sales, special sales team. Early on, it benefited the group as a whole because we were able to leverage sales through electronic bidding processes in them. We maintain the same model, and we did a spin-off a new company, a replica company today, they already have revenues and they have 10 active clients. That's good to show how that flow that I just explained to you works. In addition to that, we remain committed with the development of new technologies and trends, specifically talking about green hydrogen. Today, we have a green hydrogen cell, which was created. Just now this quarter, we have 7 people totally dedicated to that area to create green hydrogen initiatives within the company, but also looking outside the company to see what are the trends around the world. We also have advanced phase studies for a pilot plant for green hydrogen in Paraná. We have 5 lines in Paraná so that green hydrogen would be replacing natural gas just as we did with UTS with cement. And then at a later phase, we wouldn't try to understand whether ammonia would make sense for fertilizers or as a replacement for fossil fuels. Another interesting initiative in addition to the electrification of the fleet, as Helena mentioned. We're also doing some pilot processes for electrolysis within the off-road trucks, interesting to be able to inject green hydrogen directly into the trucks engines. And lastly, UTs as I mentioned, cement and steel in high scale. And last thing, which was also mentioned by Helena, also have to do with our flexibility in our methodology. In addition to innovation actions in operations. We also, along with the CSN foundation, we will start doing innovation works in the social arm of the group. I have a first case and the first case will be this fostering the honey and organic cotton production chains for agricultural families in the countryside. So that's what I had. And I'd like to reinforce that we are totally committed in bringing the best technology that there is around the world to the group so that we can increasingly improve our positive impact in Brazil and in the world. That's our mission. Thank you all for your time and attention, and I remain available, as always. And I'll turn the floor back over to our Commercial Director, Mr. Martinez. Thank you.

Good day to all of you, and I would like to begin speaking about the global steel market. Everything happened in the United States, everything good happened in the United States and in our forecast, it will continue to happen in 2024. It is a country that in fact, we would like to see this in Brazil. The industry represents 25% of the GDP. It continues to be strong, growing all of the steel mills and especially the ones that we follow up on as the core of [indiscernible] will have an EBITDA margin between 21% and 27%. [indiscernible] acquired our unit in the United States. The GDP for the fourth quarter was 5%, unemployment 0, the economy growing well. The closed economy and the last month, the steel went from 880 to 1,150. In the automotive industry, 1,150 in [indiscernible] and a rather realistic forecast is to get to the fourth quarter in 2024 to 1,220 returning to the levels of 2023. In the United States, everything is good, a recovery of the automotive sector. A great deal of work in infrastructure, all of the programs ongoing and long steel, and other steel all of the companies accruing the number of clients. And as you can see, all of the clients are growing in flat steel and long steel and in the infrastructure sector and consumption good company is quite optimistic for the coming year. Now besides this, we observe that there is discipline when anything happened in the last few months. For example, we see discipline on the supply side as you can see here even when the market is somewhat soft in the short term. It is fantastic in China to add to what was said by Benjamin. There is something very interesting. The prices in China have risen. They're at a better level. They're around 566, 580 per [indiscernible], which is also positive for us. Another very important side, although China in 2023 exported 1 billion and 100 million tonnes of steel in exports in 2024. Based on the fact that we have analyzed, we're going to focus more on civil construction, not necessarily in real estate, but in infrastructure, focusing more on the domestic market. And of course, we're inferring this. We estimate that the trend for China to export their appetite for exports should be reduced and this should favor us. Now this is what we are calculating here. Also due to something that should happen a recovery of the margins of the plants in China. If we look at the EBITDA of all of the steel plants with rare exception -- all of them have a negative EBITDA. Of course, they're all subsidized. They're all tapping the market throughout the world. Well, this is the best backyard for them, for the Chinese. And this should favor us because of the recovery of margins that will be happening in their demanded market. And due to a reduction of inventories that they had in the last quarter, there was a recomposition of inventory that will facilitate our life. What also happened in 2023 and that favors us in terms of iron ore. The block furnaces worked with very high utilization level. I have never seen levels lower than 90% in China for glass furnaces. Well, basically, this is all I'm not going to continue on because we have several speakers and subsequently, we can answer some questions during the Q&A session. Now Brazil, [indiscernible] has been disseminated in the media and I'm optimistic and realistic when it comes to the coming year. I don't think the market was bad this year. What was bad was Brazil that allowed for the import of so much material, searching for some of apparent consumption is not bad. It's reaching the levels of 2010, 2012, where it was close to 15 million. What was terrible was to see 22%, 23% of material 3 million to 4 million tonnes coming into the country. Now let's carry out an exercise if we cut this amount in half 15% or 16%, it's more than 1 million tonnes, entering our domestic market for the coming year. Now what was bad this year for CSN in terms of operations, in terms of operational excellence, and Brazil when it comes to protecting itself against asymmetric unloyal import that are out of specification, totally out of control, and as I can say, absurd. When it comes to the market, you have seen very positive sign. Let's look at Volkwagen that is working with a second shift of trucks [indiscernible] more chassis [indiscernible] that work for school to service the demand of trucks. The automobile sector is working with a better outlook for 2024. I am partner 2 or 3 or 4 suppliers for Volkswagen and other companies, and they are speaking about more positive figures for this sector, the coming year. And the other sector we're repeating what we already know. TiVo construction was the best year for concrete and for those hotel construction mesh, what an excellent year. There is a carryover of work that had to be finished. If it wasn't a good year for cement, it was an excellent year for cement. All buildings have to use cement and cement was used broadly this year. So the measures and everything else had an excellent performance. All of the companies working with the extended products, and in construction did very well. Simply look at their balances. The same will continue to happen in the first half of the year in [indiscernible] construction. And I'm not speaking about infrastructure because positive things will still happen in that sector. [indiscernible], we will have a growth of 3% the coming year. Now, in my opinion, the growth in the coming year will be 10% growth for CSN. We have to recover what we were not able to achieve this year and have an increase because we do have room for growth in some markets. Now, regarding the premium, then this is in accordance with a report that Leo has just published. Looking at the premium regarding the import product of BQ 564 of 3,804,000, this represents 8%. Now we don't [indiscernible] from BQ, our output is practically 50% of coated products and the premiums are higher there because premiums practically reached 15%. And we did well this year for those who were able to live well this year with imports of 23%. Going forward, will be very simple. It's a positive sign. And for the coming year, we could perhaps think of a margin recovery due to cost to operational excellence and why not because of a price increase. We need to recover our historical margins of 25% of EBITDA, which is what I am used to working with for the last 22 years, basically. Now in terms of the commercial strategy, no changes either. Let's look at 2023. That was a very difficult year because of imports. We did not change anything at all. And despite the balance of imported material, we were able to increase our share in coated material. In the third graph, you can see that we maintain 50% of our output in coated material. We had 41% for galvanized, 9% for metal sheets, slightly impacted because of impacts from other countries, but not China, and we're working towards resolving this. And in this strategy, our footprint in several markets, not having all of our eggs in the same basket, of course, a full portfolio of products. We are the best portfolio, cold laminated, hot laminated in all sectors to sell less for more highly fragmented base in flat steel. We had a growth of 12% to 14% in clients. We have 2,300 clients in the steel network and integrated solutions for all customers, not only industrial customers, but also those of civil construction. We're working on other solutions, integrating into the portfolio, the cement, the concrete value-added products and reinforce steel.

Now in the bottom graph in the circle, I like to change the word spot for sales without a fixed price. We have 66% to 70% of floating price. We can do whatever we wish. And this helps us in terms of price flexibility and freedom to do whatever we want with price. And between Automotive and White Goods, jointly, we have 24%. So this [indiscernible] of our contracts extend for 3 to 6 months. This is a change that we implemented quite successfully during the pandemic and that has remained in strategic projects as a conclusion. We have a relatively small CapEx of BRL 1.2 billion for a very conservative figure to deliver additional EBITDA margin of BRL 1 billion until 2027. We can advance several of these projects, and they refer to some activities that are practically in place. One is an increase of participation in Panatlântica. We go from a stake of 10% to almost 30%. We're very, very close to having an industrial [indiscernible] once again in the United States through service centers, and I'm referring to several of these centers. The Lusosider Service Center that is already under construction. The expansion of prepaying that is coming to Brazil, the material is at the port, we're going to begin to assemble it, expansion of cold-rolled products, expansion of template that should be concluded until 2027 and optimization of long steel from 200,000 to 400,000 per year. This is what I wanted to share with you. I will give the floor to Alexandre Lyra, who will speak about the operational excellence. Thank you very much.

A good day to all of you. I am Alexandre. I joined the company a short time ago, I began in February and I am responsible for the UPV plant, the Presidente Vargas plant in Volta Redonda and the subsidiaries we have in Porto Real and other sites. Now upon arrival, I was faced with an enormous challenge. Benjamin has mentioned some of this in the first half of the year, we underwent difficulties, especially in the steel plant, because of specific equipment, these were not problems spread out throughout the plant, especially in the system to capture gas from converters as these are big, large equipment with a long lead time. We immediately carried out a diagnosis in terms of what we would have to improve in terms of spare parts. We placed the orders among the suppliers. We carried out the first maintenance of a converter in August, the second maintenance will take place in December, and this cycle will end in February with the third converter as part of the challenges that will make these figures possible. And all of these figures, of course, have double-digit Plate production almost 30%, cost reductions of 10% in Plate cost, Rolled products 19% and in sales 22% for laminated deliveries. Now to make this significant growth feasible in 2024 compared to this year, we're basing ourselves on 4 pillars to enhance our operational excellence. And as I make my remarks, you will see that most of these pillars are leveraging what the Chairman mentioned that CSN does have scale. We're in several businesses from maintenance, innovation with CSN Inova and we're going to make the most of these synergies to enable these enhancements in operational efficiency. First of all, we're going to work on our coking. The coking reducer has a significant weight and the cost of our steel plate now to go back to a level of production above 50%. [indiscernible] to guarantee our competitiveness in 2024, so we will invest heavily in the coking plant, almost 4 billion plants until 2028, 2030 in Sintering, once again, heavy investment connected to environmental impact for electrostatic reduces. And in the machine efficiency, we have changed the strategy for maintenance of our Sintering machine, and this will enable us the growth of production of 30% in a few months. This will continue on during 2024, 2025. Now capturing the gases from the steel mill, I have already spoken about this. We're concluding the cycle that will end in February, help us in the production of our converters. And we're working in the continuous lamination products both in the steel mill so that these can be used in our BQ rolling machine. Now all of this in synergy with CBSI. CBSI Is growing not only in terms of labor, but in the quality of the maintenance labor. We spoke about the growth in electromechanic maintenance and their offering of full support to enhance our maintenance processes. The second bullet point, productivity. We're going to focus on product [ strategic gain ]. When we carry out maintenance services, we have a control tower through which we will monitor the entire maintenance team, our own as well as that of CBSI. Whenever we have a breakdown, we will mobilize our personnel to reduce the mean time to repair. This is the focus of productivity with the help of CBSI. Now the third point, the third level for improvement is specific consumption and metallurgical yield where going back to a practice where we were a benchmark in the past, something we loved through the year, the issue of technical excellence and deep knowledge of the processes, the stability of the processes. We have a significant problem in terms of implementing lean manufacturing at the Presidente Vargas plant, but a lean manufacturing that will be connected with all of our innovation initiatives that we have in our portfolio using analytics to better understand the variability of the process, an example is a better control of fuel consumption in our regenerators in the furnace. This will enable us to increase the temperature and reduce the consumption of coke in the blast furnace by using analytics. So specific consumptions and metallurgical yield will be deployed through lean manufacturing with the support of Inova and by mobilizing our teams. We have gone from 0 groups of Kaizen continuous improvement, which is the base of the lean manufacturing process, reaching 60 at the end of the year. And our goal is very bold. We want to go beyond 1,000 groups of continuous improvement, involving operators as well as managers all working jointly towards stabilizing the process. As for ESG, starting with people, we have a very nice program in place to innovate Safety 6.0, using all the track record we have of incidents at the plant for the last 80 years and transform that into knowledge to really understand what, when, and the circumstances of an event so that when we have to interfere or work with an equipment, piece of equipment, before that, we know in advance the risks that intervention could entail so that we can operate preventively. That's what we call 6.0. Also very important in terms of motivation is to have our leadership on-site. So every day from the plants director all the way down to supervisors, everybody visits there, they take about an hour to look at safety, cleaning, interacting with our employees. We'll only be able to implement those initiatives to improve if we have operating discipline and if we generate engagement on the part of our employees. So to be there every day at a fixed time, there is no excuses. I have a meeting, I have a phone call, no. We are all there present on the floor to generate engagement on the part of our employees. Also about the environment, I'm not going to repeat what Helena has said. We have invested in Sinterization. We're also making our operating people aware of their role in decreasing environmental impacts. In terms of investment, I'm not going to go into detail. But as I mentioned, as coke is key to our production, we need to increase our own production to be more competitive and reduce environmental impact. We're now investing in batteries to recover furnaces, have already demolished an old battery, which will be rebuilt -- actually 2 batteries will be rebuilt by 2028. We also see that our investment plan is quite ambitious. We're talking about BRL 8 billion from 2023 to 2028. Most of those investments are already ongoing in terms of engineering development, quite advanced when we talk about the coking processes. And for the next months, we expect to hire battery number 2. So again, BRL 8 billion of investments in the coming years, which will generate an EBITDA -- BRL 8 billion, in other words, a great profitability for shareholders. Those are heavy investments, massive. You know that steel is very capital intensive, but all projects are well mapped out and we are already, by 2023, starting it, and we'll continue to detail the engineering specs, the hiring of suppliers to complete all that by 2028. Thank you very much. I turn it over now to my colleague, Eneas, who'll be talking about mining. Over to you, Eneas.

Good morning, everyone. It's very good to be here once again at another CSN Day, 38 years in the company. So I'll make a brief presentation as usual. I only would like to underline a couple of relevant points relative to our mining operations. Our leadership is our President, General Managers. We have people connected online from [indiscernible], Casa de Pedra, from Fernandinho and from Porto. And they are responsible for the successful journey we had in 2023 and also work to make things happen in the future. Our new operating model, as the President has mentioned, around our new product portfolios and product has delivered valuable results. Over 10 years with no fatal accidents. That's a landmark within this industry. A lot of discipline in allocating capital in line with the best ESG practices and always hungry for innovation. Record production levels, record shippings, quality improvements, better costs despite inflation peaks and capital allocation, maximation of assets working sell back in 2024, all our units will be working at full steam. And of course, prioritizing projects that bring about more returns, [indiscernible]. As for ESG dams, all dams are stable. Our focus now is in speeding up decommissioning within, of course, the best management practices, a highlight around diversity and decarbonization. We are ranking #6 in the global ESG ranking, and we're going to fight for #1 in the coming years in governance. We have a technical office now encompassing risk mitigation, expecting more stability and sustainability for our results. In closing, we are a large mining company, and we know quite well the resources we have at hand and we have an important role to play to support the steel industry, which has significant challenges ahead of us. And I'm talking about our clients, our [indiscernible]. And I'll now turn the floor over to Pedro, who will be touching upon our figures.

Good morning. I'll start talking about our Seaborne Iron Ore demand for 2024. We expect this market to have a deficit next year. We see demand going up by 39 million tons, a supply that's growing only at 21 million tons. Much of that growth in demand comes from China. This is not a consensus, but that's how we see it. We see an important increase of $140 billion, the package, which was announced by the government in China along with an inventory stabilization as we show in the next slide. Southeast Asia should continue to grow above the world average from the point of view of GDP and industrial output, and with this, we'll have a higher demand for steel and iron ore. In Japan and Europe, after 2 years of weak performance, we expect to see a resumption starting the second half of next year. On the supply side, a growth of 11 million tons coming from Australia, 2 projects from Rio Tinto, next year from Brazil, we have our own growth [ 2.5 ] million tons and also marginal increases from Junior Miners across different areas of the country. For Canada, the overcoming operational problems caused by fires and also projects ramping up and then it should have a positive impact in supply. As of China, as margin as said, from January through this November, have the highest level of use of blast furnaces in China for the past 3 years, 89% of use and their inventories reached minimum -- historical minimum levels. If you compare the average for 2021 with what we saw last week, the last available data, there is a gap of 31 million tons, which have been consumed from Chinese inventories. And we see a recovery of those inventory levels, especially at the port levels. As steel mills, we continue to work at a very pressured working capital level. From the incentives I mentioned before, that $140 billion impact comes from an incremental demand according to specialists of 7 million to 12 million tons for steel of additional consumption. And then if you adjust for -- or additional, that's 90 million additional tons. So if you add those 2 effects, a gap on the one hand and this growth in infrastructure spend, we see a growth of 25 million tons. So the real estate industry was a main driver for China. We see a recovery or at least stability with a possibility of an upside next year. Auto production in China, auto exports from China will also increase in 2024. So $120, $130 is the expectation for prices that we have. That's a market consensus, give or take, which are already priced in future markets. If you look at the average for 2024, it's sitting at $125. Maritime freight low growth in the Capesize fleet, combined the bauxite volume from Africa should be able to sustain a level for freight costs about $1 up, still we were able to negotiate amounts. We have offers below USD 20 for next year. We expect to conclude some of those negotiations next week. There is an important initiative on the Sea Freight front, which is a drainage in the Porto de Itaguaí to increase the draft of the channel so that we can increase the volume shipped by vessel. And this will have an increase of $0.80 in terms of savings. And that's a fundamental cost when we look at the price of freight as delivered in China. Moving for dams management. Once again, in September, we had the renovation of the stability statement for all our dams. We have concluded the works for the Vigia dam. So now we have only one upstream dam to be addressed, have included engineering works for before, have already created a channel, which is a key part of the process, and have already contracted studies for the de-characterization of the Casa de Pedra dam from the governance standpoint, which is also key for the operation of Casa de Pedra. We have been conducting external audits twice a year in all dams including projects. We have advanced in the reprocessing process for tailings, and I'll be touching upon that in a moment. And we have something that we have to celebrate every day and we're very proud that which is 0 accidents in our dams, and that started in 1930 [indiscernible] de Pedra mine. As for operational resilience, we have invested heavily in a more robust rainfall program to avoid floods. We have improved our process for drainage and mining plant. We are working at larger stocks near production plants to avoid disruptions even on heavy rain days as for railroads, inspections monitoring, prevention of accidents. We have been doing diagnosis on a continuous basis to prevent high-impact events, such as the one that we had, unfortunately, early in the year, but that didn't prevent us from breaking hackers in volumes. In terms of handling at the port, we have adopted the technology, Felipe mentioned, which is a forced drainage of ore, reducing water instead of carrying water on the containers, decreasing the humidity content of the ore. We have, as you call it, dewatered those components from our mines. We have stored low moisture products that allows us for a better blending of the materials, and have created a simulator and have adjusted the rates by product type. The concrete result is a higher match between our plants and our execution that led to a drop of more than 2/3 of cost in demurrage in 2022 to $0.65 per ton. Today, that number is at $21. And we're breaking records in volumes. That was really an important evolution for us. Now maybe the most important metric for our investors now. Volume of production, the margin per ton is very high. We have a guidance for the year of 42 million to 42.5 million tons in 2023. We are getting close to that. We're quite confident we'll deliver 42.5 million, maybe exceed 42.5 million, the cap of the guidance. We are working hard to deliver that. We're working hard, as I said, to deliver the best possible by the end of this year. Next year, we're going to deliver a growth of 2.5 million in production and we'll be buying less 2.5 million. So have a guidance for next year of 42 million to 43.5 million tons. That improvement in mix we generate a decrease in our cost, CPV, and this reduction has to do with the discipline of trying to find better unit margins to better compensate the whole logistics system. And from the point of your sales volume that can be supported by a potential reduction of up to 1.5 million tons of ore that we have in inventory today, those low margins from China that Martinez mentioned, they favor our low-grade niche, and that's the view for 2024 so far. As for C1, we have a guidance of USD 22, we see a cost moving sideways. We're going to make a big effort to reduce that some more despite the inflationary pressure and for next year, it's $21.5 to $23 per ton with an increase in freight of $1 dollar, we have more logistics costs such as diesel, railway, and we are trying to reach a higher operational resilience, which will include our investments and also in higher preventive maintenance. At the same time, we have a scale gain because of the additional volume we're going to be bringing to market, our own production and increase in efficiency, several initiatives to increase efficiency and reduce costs. One of them, just as an example, is placing advanced diesel stations to reduce replenishing of those trucks. The combination of C1 in line in 2023 and the mix improvement will result in a more competitive COGS next year. In other words, better margins given the price projections as of today. Now as for our projects, we have an expansion projects, what we call Phase I. We are increasing by 1.5 million to 28.4 million tons, which will lead us to a volume of 68 million tons in 2028, an average iron content of 65%. The quality issue is key. Today, our discount when compared to benchmarks of about USD 10, below the [ $62 ] level. And with this level of quality, we'll be able to have a premium to be above USD 10. So more than $20 of gap. That will be margin cash generation for our shareholders, given that costs will move sideways as we move forward. CapEx, as [indiscernible] updated, BRL 15.3 million, an average CapEx of BRL 3 billion, that CapEx accounts for a growth of unit CapEx per ton of 5%, in line with inflation of the period. As for the gaining volume, I'd like to highlight the review of operating parameters for P15, which allowed us to expand the plant's capacity after the acquisition of the main [indiscernible] of equipment coming from first-line equipment suppliers. And the elimination of some bottlenecks, and we moved up to 16.5 million tons. Updating of the projects, I'd say, discipline in hiring led to an updates in schedule and CapEx prioritization, the hard work of the technical team and trying to find best solutions for all projects, P15 is an example of a concrete example along with the commercial strategy, which is part of our DNA of always negotiating to the last penny with all suppliers that allows us to update schedules, and we are increasingly more confident as projects move forward and become more mature. The ultra fines projects, 1.5 million tons to process part of the tailings that come from the central plant, we are already working on the details, negotiating the first bundle of equipment is moving forward really well. CMAI Pires, we are the basic engineering process, CMAI B4 and Casa de Pedra 1.5 million tons each. In the case of P4, engineering has been concluded. We're going to be going to market with technical specs in the next weeks. As for the Casa de Pedra, we are doing the probing and characterizing the mineralogy efforts, P4 is a project that has allowed us to consider expanding capacity, sort of anticipating some of the volumes coming from Phase II. As for the port, we are expanding to 60 million tons, progress in infrastructure work. We're now finalizing the contract to expand the peer. That's an important step to enhance capacity, and we are already negotiating the detailed engineering to expand the railway lines by the port. P15, our gas station has been concluded. We have 27% advanced in this project and in the office, we have 75% advanced releasing 100% of the area where the project will be built. And with the new hiring, we have bundle 2, excluding what has already been contracted, which is filtering. Now the second part of the structure is pending, the first part has been started and the updated startup will be in 2024. And in terms of EBITDA, we're forcing BRL 4 billion. If this plant had been operating in 2024, the EBITDA would be almost double. It would represent BRL 7.5 billion at present day prices. And this shows the value generation that this project will offer our shareholders a novelty for the market and additional step we're taking in verticalization of the chain that is part of the green steel. As Helena mentioned, we're developing this project in partnership with [indiscernible] is also a shareholder of CMIN, and we have a very competitive efficient local system, creating a pellet plant, a pilot plant. And in Abu Dhabi, we have an employee [indiscernible] 12x to this project. We're doing very well in terms of the feasibility study, and we're awaiting the final investment decision in the coming months. Now the capital allocation is very relevant. We're only at 10% of the project. Now the emission per ton represents a drop of 73% ton of steel produced. This is part of the solution of decarbonizing the global steel segment. Now regarding performance highlights, our guidance is 42 million to 43.5 million, who knows we can maintain and overcome what we're delivering this year, which is a record. We're delivering a growth of 25% vis-a-vis the previous year. This shows an advance in operation excellence considering no new plant came into operation. In terms of cost evolution, this will be the third year with the cost going side ways despite the inflation in the products. Now this additional volume that we delivered this year shows a growth in revenue and EBITDA despite the drop in iron ore prices vis-a-vis 2022. Now regarding our balance, one more year where we end up in a deleverage position with a cash position of BRL 10.6 in the third quarter. This operational result enables us to keep our payout policy of 80% to 100% of net profit. We have already paid out BRL 1.4 billion to our shareholders and along with this, we continue with our investment and expansion plans. We have secured funding of $1.4 billion for the long term with JBIC and Nexi. And this is important for the execution of our growth plan. This was mentioned by the Chairman at the beginning. We have a shareholder return of 86% throughout the year of '23, since January until the end of November this year. I would like to conclude by speaking about ESG. We're very proud of the performance we have had so far, and we intend to continue on with this agenda. Of course, we preserved the privacy of all of the players, but we're working with 4 of the best in class. We're the best in terms of lower COP intensity per ton of iron ore produced. We continue to make strides by expanding women representation in our work force. As Helena mentioned, we're going to continue advancing in this. Safety is a nonnegotiable value, of course, and our results have been exceptional perhaps the best in the world with 0 fatalities in the last decade with the lowest frequency rate. And this explains why CMIN is in the sixth best place globally among 159 companies, and we're going to continue to work on this to continue in handing this sustainalytics agenda. Thank you very much, and I give the floor once again to Martinez.

Very well. That is a challenge to be as brief as [indiscernible] commenced to begin. We only have good news. We're undergoing a new growth cycle in Brazil after several decades. There is no doubt of this. In the last decade, after a peak in '14, '15, we have a growth cycle, and we're very close to our effective capacity with low [indiscernible], which is something that we can in the market to be able to compete among the players. Obviously, all of this is supported by a very favorable moment in the real estate sector. Civil construction, residential construction and others. And as I mentioned previously, infrastructure has not begun yet. We have some investments, some private initiative, but nothing has happened in the public sector because they're working with sanitation, concession, highways and port. Of course, this will materialize, and we will have a change in our product portfolio. Now the foundation for our prices is very important in the 4 developed countries. We have much higher price levels, of course. It's very difficult to say that we haven't recovered the prices because beginning in 2021, we have a growing curve in terms of prices. In December and January, we should recover 12% to 15% of prices in reais. To speak about integration, we have absorbed LafargeHolcim. We didn't fire a single employee. Those who left wanted to leave and or they left because they couldn't adopt our working culture. Synergy, we have obtained most of them. They represent 600 million. At present, we have 500 million. The diversification is full. We have all types of cement, several product portfolios with added value. We have concrete. We're working with builders. We're entering construction material stores, premolded material and then some -- and logistics. Basically, we are a logistics company that is distributing products, [indiscernible] steel, iron and much more, and we're going to become a very large marketplace. 40% of our clients place an order electronically through e-commerce. And all of this will be crowned with our network. Very soon, you will see stores in Sao Paulo and Hill basically in the Southeast region. Edvaldo will explain to the right, the synergies that we have and the part of integration. Growth, of course, has taken a very fast pace. We are growing to 13 million ton market share. I tend not to speak about this, but we have had a growth. We have 22% of the Brazilian market at the lower left, as you can see. In Sao Paulo, we had a growth of 31%, 32%, a growth of 24% in the Northeast. We are in a region where we're still not in the south and Center West. We are still in a very restricted region of Brazil. We're always betting on our customer base. We have 20 clients registered. And regularly, we sell to 13,000 customers per month. Well, remember, I said we sold the great deal in back because of the structure and with the entrance of LafargeHolcim and the cement. We are now prepared to service the infrastructure sector in bulk. We now have 69 bags that will be sold in box that can be used in construction companies covering the entire region of Brazil, and it can grow in Sao Paulo and in other states. In terms of the retail market, you have the novelty, the [indiscernible] stores. They are construction material stores. The intention is to reach 200 stores in a 3-year period. This is retail selling. It's not a business that we're continuing because LafargeHolcim did not focus on this. We're not going to compete with our clients. We want to clarify this. It is an extension to come ever closer to the final client. In terms of value-added products, we're working with courts and all of this to complement our product portfolio. Now all of this is part of our growth strategy, concrete. We have no intention of investing in concrete plants. We're going to invest in partnerships. We want to reach BRL 1.5 million, which is what our main competitor has nowadays and in terms of logistic, we have to position ourselves, create a distribution center, service stores, regional stores, all of those service points that we'll be able to work with steel, cement and perhaps work as a marketplace platform for other materials. I will now give the floor to [ Eddie ] to speak about the industrial part.

Good afternoon, everybody. I'm going to speak about the cement platform. We had 2 recent acquisitions, LafargeHolcim and we have become the second biggest cement producer in Brazil with an installed base of 17 million tons, going to 25 million tons with the expansion projects. We have a concentration in the Southeast, but we also have a presence in the Northeast and Midwest. Now the distribution centers are very important to offer us greater capillarity in the sale of cement. And we're working with value-added products, concrete and others. At the end of 2023, we now have full integration with LafargeHolcim with an annualized gain of approximately BRL 500 million, highly aligned with what we had forecast upon the acquisition of LafargeHolcim. Of course, this is a reason of pride and we have an excellent team that will guarantee that we will continue to capture positive results. It's important to manage [indiscernible] has been mentioned. We're ending with a reduction of 7% in cost. But for the coming year, what we're seeking is an additional 8% cost reduction. Now this is important and because of the growth that we will have in the market and this growth is only possible, thanks to the capillarity that we have with logistics with the assertive commercial strategy and because of our competitive costs. Now this year, we have worked towards reducing bottlenecks in the plants that we acquired and reactivating equipment blast furnaces and reactivating the plant in Sorocaba that has been operational since March of this year. Helena spoke about our commitment towards sustainability. We have the lowest CO2 footprint in Brazil, but this does not suffice for us. Until 2030, we would like to reach what the sector is seeking for 2050. The Revalora platform, which came with the acquisition of LafargeHolcim is a platform that captures and prepare tailings residues. They're going to give us a boost. We're expanding this platform and we're going from a dependence of 60% of coke fossil fuels to less than 25% until the end of 2030. We're also very proud of what Pedro mentioned in terms of mining, the rate of accidents with lost time has been dropping through the years, has become stable at a very low figure. Of course, we're looking for a 0 rate accident. We do have one of the lowest rates of this sector in Brazil. What is very important as part of the businesses as mentioned by Benjamin, the BRL 1 billion business, this is a business we just inaugurated. We began selling agricultural limestone in November. And through using our existing assets as well as through the rights of mining that we have granted in several parts of the country, especially in the green part where you see the growth of agri business in the country, we're entering this business with great strength and we hope to reach in the midterm more than BRL 400 million in EBITDA and net revenue above BRL 1 billion. Now to go back to cement, where are we heading to with the cement going forward. We're the second largest producer in Brazil. We have an organic way to grow, and we can also grow through M&A. In terms of organic growth, we're ready to set up 3 new plants in Brazil to service markets where we do not have a strong participation, a plant in Para for the northern region, a plant in the Northeast that has the challenge of servicing the market in Bahia and the third plant in Parana, where we would like to service the Southern market. What is interesting about these projects is that they are ever more mature. They're extremely mature. We have an operating license in the Northeast. We will be receiving the operating license in the South in the first or second quarter of 2024. This will enable us to set up our plant. And of course, these projects will start up as soon as it makes sense, depending on the market. And when the -- well, the utilization factor of the industry goes beyond 80%, Brazil continues to grow. This will be a very pressured thing and everything will depend on the company capital. And we have the chance of growing through M&A. Our track record has been very interesting in M&A because of our acquisition and the way we capture synergies. We are confident in terms of new possibilities in Brazil and outside of Brazil. Of course, we will carry out these acquisitions and mergers if they make sense for the company. Now to conclude with the main highlights. We grew sales 7% in '23 vis-a-vis 2022. So our competitiveness, our strong commercial strategy and the capillarity of our logistics, net revenue grew 60%. We had a significant cost reduction and the EBITDA margin grew 30% compared to last year. The margin is very close to what we had last year, but with the integration of the LafargeHolcim assets, this should allow us to return to the revenue levels we had in 2021, above 30%. Thank you very much. And I will now give the floor to the Energy Director.

My name is Rogerio Pizeta. I am the Energy Director. I'll try to summarize or briefly summarize what we have to show in terms of energy for the period. To do that, I have to go back and talk about the strategic rationale, which was proposed in August last year when we announced the acquisition of [indiscernible] and the strategic rationale was attractive investments or to make investments in attractive plants, trying to diversify business and industrial competitiveness through production and cost reduction through energy cost control. Without forgetting sustainability, of course, all those investments are made in renewable plants. I think we were successful. We've been successful in the year. We are now reaping the fruit in 2023, we are consolidating our strategy, we are self-sufficient in energy with renewable energy. We have collected the benefits of the plans and synergies that we have. We have consolidated as a relevant player in the energy market. We rank probably among the 10 or 15 hydropower generators in Brazil. We have the turnaround of the CEEE through operational efficiency and cost reduction using all the management processes that we have in place at CSN, and we continue to move forward in project development, Brownfields and CEEE and the Greenfield projects in PLE, the solar Floriano project, we continue to move forward. With that, we managed to reduce CO2 emissions in our plants. And also, we also obtained RAC certification, as mentioned by Helena, that all takes us to this current situation on the next slide, our portfolio moved from a simple operation with a share of only two plants. [ Itaguai ] to actually have an energy operation per se, where we operate, manage different power plants, four or five by now. So we actually reached 2 gigs of capacity. And we have in the pipeline projects over [ Novo ], for example, wind plant for the South and the photovoltaic project in [indiscernible] Floriano, with solar project at 1.2 gig with that aim to reach 3.2 gigawatts of capacity. That shows that CSN does have the ability to absorb new investments and deliver what was promised, and that can be translated into this energy balance sheet. 2022 generated a small amount, 2023 a higher level. We were able to absorb all of the acquisitions demand from Lafarge, Elizabeth Cement and we're ready to absorb future acquisitions with energy surplus. So the limestone project is one of them. We invested in hydrogen as well. So we do have an interesting capacity to offer energy to all those projects and still operate as a player in the energy sector as we're able to sell our surplus energy. And what does that mean in terms of numbers? Here, we have a better idea of the whole, actually, that does not apply to energy specifically, but we can see savings producing the steel, BRL 100 million, BRL 190 million cement and [indiscernible] mining, CEEE with an EBITDA between BRL 160 million and BRL 165 million this year. So the whole energy business when combined with the savings we collected from the acquisitions through self-production synergies and also the two consortiums we participated where we leased two CEEE plants. With all of that, we have about BRL 580 million or BRL 600 million saves. If you consider the future purchase of energy, we will reach BRL 870 million in savings. So what's the takeaway? 100% of the objectives were delivered. We have PCHs of Sacre and Santa Ana operational delivery self production synergies, replacing the contracts, which were in place or legacy contract that we had from Lafarge and Elizabeth Cements. Now moving straight to CEEE. We showed the CSN's management capacity, the tools that we use, highly and successfully integrated. We were able to delay some investment so that we could better analyze the scope and do the right quotation processes and deliver better results. And we focus on this first year on reducing costs, restructuring the teams, fine-tuning the whole management process, restructuring contracts, especially those which are recurrent and of course -- and are already leading to savings, which are significant in terms of cost reduction and we'll see those reductions coming on stronger in 2024 because part of that only happened throughout a year or later in the year. So there is a trend in cost reduction for next year. So EBITDA tends to go up. When we look at the price, the future price curve and on the left-hand side, in the bottom, we see our generation capacity, the projects, [indiscernible] the first two, as they are ramped up, we have an increase in the physical guarantee. They are the pipeline and COG, the operational center, will allow us to integrate all plans centralizing the operations. So we are able to deliver all the numbers you had planned to deliver. After that, the Floriano Solar Complex, 1.2 gigawatt being developed in the [indiscernible]. We filed for the permit in February 2022. So we can count on i5 incentives for energy production with the respective discounts. We have a public hearing held in August. The ALP was renewed until 2025, we are installing a tower to create an alternative to sell that energy in the free market or in the captive market. We are working towards that right now as we put up this new tower, that was a regulatory demand if you want to sell energy in the capital market. In terms of energy, that's what I had. I'll briefly go over natural gas. That's also an important challenge we have ahead of us. Have a very large consumption of natural gas in Rio de Janeiro. We account for 50%, 60% perhaps of the total volume and with the changes we've seen in the market, in terms of regulation and the new environment that allows us to start talking about migrating to the free market for natural gas. The tariff is about 70% is molecule, and the remaining is distribution and transmission. So in the second quarter of 2024, we tend to have at least UPV out in the free market, obtaining that benefits of cost reduction for the molecule through competitiveness. With that, we are trying to have a reduction in cost or higher EBITDA of about BRL 180 million or even more, depending on market conditions that we buy the molecule. For that, you need to overcome a few barriers, especially regulatory barriers. We have in contact with the regulatory agency in Rio, the governments, gas suppliers working together to make that process viable so that we can have something concrete by the beginning of the second half of the year for the free market. And then we do the same thing that we did in energy, where we start with the free market and then we move forward in supplying more gas, and we create a new business line in natural gas. That's the way forward. The market gas is becoming ever stronger. We have free markets in two states Espirito Santo and Minas Gerais. And we are working hard to develop that in Rio to reach those objectives. I think that's what I had. Thank you for your attention. And I turn the floor over to Marcelo.

Thank you, Rogerio. Last year, our energy business was presented by the CFO. This year as we grew and all the good news we had and Energy had [Rogerio]. And this year, we have the CFO to talk about logistics and I have [indiscernible], our special guest. So we are also working to develop our fifth pillar and logistics, a brief overview of our main assets. Those are very special assets with excellent recent performance and a huge potential. The example that stands out is MRS and the most important railways in the country quite well known for transport for and bulk loads with a huge potential for overall loads or shippings after the concession is renewed. There is a huge growth potential with access to multi-transportation modes to be used by the agri business, pulp and paper, civil construction. So it has been growing at a 10% base with margins of 20%. So the potential is really huge. When we look at our balance sheet, the historical cost is BRL 2 billion. If you consider market multiples, that asset alone may be worth over BRL 10 billion. So a lot of value to be unlocked to MRS, Tecon. Today, Tecon plays an important strategic role for CSN. We use this terminal to import raw materials such as slabs and pellets and also finished steel, have been bringing structural profiles from Germany to the Brazilian market. So that provides us with a lot of flexibility and also for exports as well as we export our own steel with unheard of flexibility and also with other potential clients, the port has been going through a transition now, the challenge of seeing a change in this segment. And now we have global players. So there's a drop in the volume of containers and we have been successfully finding alternatives to continue to grow, but a lot of potential to grow to explore in oil and gas with a huge area in the back of the terminal, very well placed, close to the route for the pre-salt gas. This could become a new portal, do Sul. Or become a hub for partnerships and oil and gas storage and lubricants. So a huge potential to be explored at Tecon and at [ FDL ] that's the old operational network, 1,200 kilometers leading Fortaleza to Sao Luis, today transporting 3 million tons especially fuels also with a huge potential in agri business has been growing exponentially with the renewal of the track. Next step is to renew the concession and new investments that will increase potential EBITDA by more than 5-fold especially with the new network being built, and I turn the floor over to [indiscernible], the company's CEO. [ FDL's ] CEO.

Good afternoon, everyone. I'll try to recover some of the time -- are we going to be watching the footage now. [Presentation]

So the FDL is a concession, which is a fundamental link for the region. We will bring Brazil closer to the world's largest markets, the West, China, Europe. It's a railway, which extends today. 1,200 kilometers in two phases, Phase #1. We have over 70% of that concluded. It's a world-class railway similar one would be Carajas. Carajas has the same quality standards as the FDL or the TLS. A recent survey showed a great potential for grains, fertilizers or fuel, cement and they do not compete with what is already being done, right? Those are new markets. Construction work is moving fast forward. We have 2,000 people working. 70% of the work has been concluded, as I said, and the startup is expected to happen in 2027 and the commissioning phase for the internal market will start in the first half of 2025. The cash generation, EBITDA has a very high CapEx and a very low OpEx. So the EBITDA margin is very, very high and the outlook is that will very soon see about BRL 3.5 billion in terms of resources for the CSN Group. The group today is, of course, concentrated on energy, cement, fuel. But looking ahead to the future, as it was shown you have new businesses in the horizon -- in the radar, which will ensure a long life to the group. Examples of that Inova and very, very soon this railway, the TLSA. Here we have a rail world building machine, the largest construction site in Brazil in this segment, infrastructure. Everything is owned by us. We have the one of the five largest producers of railway ties in the world made of cement, cement made ties for the tracks. We have the largest welding station in the Americas. We import the tracks. We weld them locally, only using our own equipment. Our own trains, our own locomotives, our own assembly, equipment, all ours. We have a concrete plant if we combine the Sao Paulo City region, it won't reach the level of production we have up there in Salgado. And just to finalize a few images of works that have been concluded something close to 900 kilometers. Carajas has 870 in kilometers of railroads. We have close to 900 kilometers, part of which 190 kilometers stays in Pernambuco, the neighboring state, and we are now focused on finalizing our project and make it operational by, as I said, 2027. That's what I had. Thank you.

Let's begin to conclude because of our time constraints, I will speak about the financial performance as there were a summary of the messages we convey to you. Well, all of the main businesses, giving us very good results. I would say that they are reasonable results that point to the importance of diversification in the CSN Group, very good result in mining, cement and logistics, a highly difficult year in steel. And despite this, delivering the best year of our history with everything that we have shared with you, the outlook for 2024 is growth. Of course, we don't give guidance in terms of growth, but with a better mix in mining, with better prices, we should have substantial growth in 2024. Now the growth in steel will come domestically, although there are doubts in terms of the price of steel. We have reached the floor of the prices in [indiscernible] in CSN, we have a good outlook in terms of prices and volume. Brazil will pick up a different pace, there will be a growth in construction, so we will have higher prices, more margins, better costs. And this will be a year where the M&As will show us why they are part of showing out the synergies, the resilience and competitiveness that they have brought us in prices. Of course, it was a year with mixed results opening the path for better results still in 2024. And of course, this should bolster all of our priorities. Our main priority is to continue to leveraging EBITDA is an important ally during 2022, 2023, we had normalization, there was an increase in leverage. Now with the M&A showing their results and generating cash, we have a natural deleveraging in the third quarter was the first quarter after fiber 6, where we see a reduction. We will comply with our guidance for the year for 2023 and in '24, a leverage of 2x and additionally to this, we have what Benjamin mentioned at the beginning of the presentation, a recycling of capital. The group is highly diversified, highly wealthy Nordestina has BRL 9 billion, but this represents BRL 20 million per kilometer. These are BRL 20 billion in a subsidiary that we don't pay very much attention to. So working with capital will not be typical. We have several options, and we can guarantee that deleveraging within the year of 2024 and beyond another ally will be a disciplined capital allocation. We're growing with responsibility and a more normal framework of dividend. We will tend to have payout closer to our standard, our historical payout and all of this will help us to finance our investments. The talent that we have is delivering P15 and building a new UPV, as mentioned. And this, of course, will change the level of CapEx. We went from BRL 3.4 billion to BRL 4.4 billion. While we can foresee a BRL 6 billion for the year 2024, and we will be in that range of BRL 6 billion to BRL 7 billion ending up to 2028. There are no novelties here. We have P15 and the great revamping within UPD. Now the impact of this will be very clear. It has a low risk and it will be visible through the coming years. We have brought [indiscernible] and where this will take us. We're speaking of a different company in 2019. Our EBITDA was about BRL 7 million, in 4 years this will increase four-fold. We're expecting an EBITDA of BRL 20-some million, a very high return on CapEx. And of course, this will have to be financed. So a few words on liquidity and indebtedness. We have a very sound liquidity position that covers our short-term debt, and we have carried out relevant efforts, BRL 18 million taken to enhance the quality of our liabilities to resolve the amortization we have in '24, '25. We recently issued a new bonus taking advantage of the window to begin to leverage the bonds in 2023. We can also issue new debentures in the future with new instruments to finance the CapEx with IFC, with banks, development banks such as the BNDES for the renewals in UPV and the [indiscernible] railroad. Now with this deleveraging, we will have a continuity of our operate, our rates that are BB with a positive outlook, can perhaps be upgraded in the coming months. And in the midterm, with a track record and a sound financial position, our pursuit is to obtain investment grade. And of course, we have to work with marketing and speak about our investment features. Why are investor and PSN will be gaining a great deal. We are very optimistic in terms of the appreciation of commodities like iron ore. We have a dollar becoming ever weaker and China becoming stronger. Now to invest in CSN with a short-term vision. The price of steel will drop, but there is much more. When we look at our micro case bottom up, there are very interesting since the CSN. This competitiveness will bring about this verticalization CPSI. The integration of the portfolio allows us a unique price competitiveness. These global cycles like iron ore, local cycles like cement, electricity, creating stability. This grant of resilience and very few players are showing growth. Many companies have not invested. And we have vectors that have been contracted in 2028, we're going to triple the figures obtained before the pandemic. What does all of this mean that we're going to be leverage. The concern that we have with the increase in leveraging will disappear. And we have that issue of the rerating. TSN is a highly complex group, we acknowledge this and the market puts in a discount of this holding as we're working with possible, we normally work with higher multiples like electricity, cement mining without referring to logistics, we're going to work to continue to show the value of our other business and the re-rating will show the value. This is just a small commercial tool and the presentation, a little behind time, and we can now offer you the floor for questions and answers.

First of all, questions and answers for those who are with us in person, then we will open the floor for others accompanying us virtually.

Thank you all. And congratulations for the event. I have two questions at my end. The first, I am Eduardo from Itau. The first question to Benjamin, to link this with what you have just said, Marcelo. How do you imagine CSN in the future, a listed holding or nonlisted holding with subsidiaries and which are the expectations if the company is holding, will you have a discount, a tax waiver or not? would this make sense, which is your mindset in this case? The second question to Martinez, talking a bit about the imports and the underlying discussion of the import [indiscernible] of course, this is a very complex issue involving several players, several stakeholders. If we look towards 2024. If we presume that this import tariff will not be added, which will be the level of imports going forward. We have seen a reduction in the volumes of imports and perhaps the domestic market will gain share vis-a-vis imported products? And how would this translate into price for 2024. Thank you all, once again.

Now when we think about the future of the CSN, we have already referred to this, CSN holds extremely good assets. And we believe that it's going to spin off each of these assets once they have the right size and the results to face up to market demand in principle, our intention is to have five businesses listed. CSN would be at the top of all of this. We don't appreciate that type of holding. We're going to favor the companies that are below us and once that holding is emptied out. It will simply work with control and not for investors that would like to invest in the company. So having said that, we have five businesses that are pillars. We have CSN Inova as our sixth pillar. And based on this as all the other businesses grow, we will have independent listed companies that are managed in an autonomous fashion and the holding above all of these will continue to shrink steadily. So we're going to spin off these companies, create businesses, add value to them, offering options to investors that want to work only in energy, mining, logistics, technology, or value-added products. That is to say we're going to create new businesses, and this will be done independently and each company will manage itself. And well, we also want to remain close to the business, and do this. I look upon growth in a very positive fashion. We have accrued excellent assets. We still have good assets that we're going to work with, always with that commitment of deleveraging of offering good payouts to the shareholders. We do have an enormous group of unique assets, and we're ready to share the development of those as assets. Our intention is to have open companies. It is important to maintain a control on these activities and to offer to each person that identifies with one of the activities that possibility of investing. I will have to leave, and I would simply like to once again thank all of you. State that CNS has a very for tough team of executive and you can count upon having a reaction from the steel plant in 2024, offering you the prices. We also count on our other businesses. We are directly involved in terms of the development, the progress of the company, we have 37,000 direct employees. I had never imagined that we would reach such a huge number of direct employees. CSN can double its activity in the coming 4 years. And of course, this is the challenge a potential that few other companies have, and we're working in that direction. If any of you consequently would like to converse with me, we can arrange for that. Please speak to Marcelo and Marcelo will make this feasible, further we can respond to your question. I would also like to thank Yamaguchi here for his presence here. He is a partner in cement, thank each and every one of you, thank our entire team once again and once again underscore my conviction in terms of the growth of CSN. Thank you very much.

I'm sorry, if you could give us your name again [indiscernible]. Your question is a very timely one and I'm going to answer it because now with more time, I can give you a good response. We have worked with a historical series of import in 2010 to give you an idea, the penetration of imports in Brazil reached 25%. Well, that's a very high secure. What happened in 2010, is that apparent consumption reached 15 million tonnes and Brazil GDP was 7% at that time. What has really happened was that the growth of Brazil with the growth of imports sort of mitigated the impact on domestic sales. Then we had several different cycles. And throughout that series, it's important to understand the background sometimes looking in the rear view mirror. It is important it offers us some teaching. During the last 14 years, the penetration rate of imports in Brazil vary between 12%, 14% with few peaks that never went beyond 15%. And I prefer to think that history repeats itself as an engineer. The trend is for everything to become mitigated. 2023, I believe, was a peak that was a perfect disaster for CSN. The market was not very bad. We had a highly -- well, unbearable operating performance, we have retracted. We're beginning to see results. And in 2023, we also had that penetration directly into our market. So I'm working with two scenarios here. Now the perfect scenario, the mid-summer night dream, perhaps what we had in the pandemic. And of course, leaving the disease of sites would be for the government to become aware of what is happening worldwide and copy what other countries are doing, work with a dumping tariff or 25% of safeguards, which is what Mexico, United States and Europe are doing currently. That would be excellent for us now. In my model, I prefer to use what you have just remarked on using the data that China, it's not going to reduce the steel production. People would say that they will become more environmentally conscious and stop producing the way they produce. It's not going to happen. They're going to use their production internally domestically and can't build any more buildings, there are empty buildings everywhere and go cities with new buildings. They're working on infrastructure at present. And in my model, I'm placing that imports at a more civilized level of 14% to 15% and BRL 1.2 million will come back to the local market. That would, of course, be more interesting for us. Well, in CSN, I cannot be very greedy and galvanized products, I have a competitor that has a better premium in hot-rolled projects. Now we did very well in these difficult periods of this year. So the outlook is positive, and with that I'm aligned with you. We should explore a drop in import. Now when it comes to cost, well, we're late. So we're going on. When it comes to cost this conspires in our favor to prepare 1 ton of slabs, you need 1.6 tons of iron ore at $137 plus 0.6% of coal. You'll see how much coal we have and ore in the lab, the Chinese like to lose money. So the trend inspired toward a recovery. In the case of CSN, a better EBITDA because of operational excellence, perhaps we can recover prices in specific product lines. This covers my strategy, at least for the first quarter -- the second quarter. God knows what will happen. We're going to work day after day. Thank you for your question.

Thank you for the question. This is Rodolfo, JPMorgan. Thank you for the presentation, very detailed across all business lines. We like to see that type of disclosure, that level of disclosure. I have a question for Martinez. Martinez, you said or you mentioned briefly a willingness to have a footprint in the U.S. again, so what would be the rationale of that move? What kind of profile would make sense for that kind of move.

Rodolfo is somebody known for a while. I do not have a lot of time, but to be sure, what is sure is that we will once again have one or two industrial addresses in the U.S. Actually, when we left U.S., it was painful for us. Because we bought that when I joined the company, and we paid [ BRL 50 million ] sold for [ BRL 500 million ] and in theory, we made money. We did. But we left during the best cycle of the American economy. And then SDI, SDI with 24% of EBITDA margin, copying our project, our growth projects, placing zinc, the painting line and becoming one of the largest American plants ahead of U.S. Steel, Cleveland Cliffs and others. So this is all between us, right? Don't let this out. Anyway, in answer to your question, having an industrial address in the [indiscernible] is the following. Number one, I need to benefit from the quota we have there, a rate that we have there to round it up, BRL 300,000 of coated material prepainted and galvanized BRL 100,000 hot rolled and BRL 50,000 of cold-rolled material. At this price level, if I able to reach a good service center, I can add -- in other words, I'm less dependent on selling coil. I become more American than Brazilian, if I may. Because they say, well, this is something I said, no, no, I don't want to do that. I want to sell less price, last minute and then be able to capture some of the American Retail that pays more. So at first, a service center would be a first approach. There are other plans that we are now assessing with other technologies, but that's down the road, maybe Marcelo can add to my answer in terms of growth in the U.S. very briefly. Last year, talked about that and this is a very interesting project for us. Today, rebar plants are emerging in the U.S. because of the potential of this market. But we made a conscious decision of not doing that now because of the capital issues, we favored deleveraging and also because of timing, those are projects that would take 3 to 4 years to mature. So that investment profile would not match the moment the group is going through now. So we are following the path of investing less, growing fast and service centers add a lot of value. We're talking about $30 million investments in one or two investments our service centers to reach the ability to process 300,000 tonnes and then gain commercial expertise and a pulverized client base that we do not have in the States. The best rationale -- very important, Rodolfo, to mention. The ESG issue in the CBAM, carbon board adjustment mechanism is stronger in Europe, but there is already noise reaching the U.S. If you look at some works being done by the U.S. government, you can only have materials poured and melted in the U.S. You know that, right? So it's useless to buy an asset in the U.S., and I was part of negotiations. Some of them, thank god, have never worked because everything needs to be brand new and clean there. It has to be hot rolled there with the right ESG value adjustments. If you buy something old and expensive, you are automatically turn off the market. That's an important piece of data you have to have in mind. And today, you see that clearly, when you look at Cleveland, Cleveland-Cliffs, for example, they have many assets that will cause problems in the future. But there are so many people involved that they can simply stop, go on strike and say, "Well, I have a lot of people on strike. Solve that for me." So that would prevail an environmental strategy, right? if you know what I mean. So we're looking at opportunities that are totally ESG-based or free of ESG issues, if I may. And there are good things to be done with lower investment levels, more dedicated plants and not only flat steel, but in long steel as well. That cycle in the U.S., in my opinion, will last for at least another 10 years. We're talking about $1 trillion amount. And the best way for a country to grow is with investments, which does not happen here.

I have a question from Marcio from Goldman Sachs. Could you comment on prices for January for long and flat steel and then a second question to [Lyra]. What's the potential in productivity improvements for next year? Then a question around mining for Pedro. In mining, what kind of CapEx can we expect? And what are the reasons for the delays on the mining front, Marcio, being brief we do not have any price increase announced for January.

I clearly said, we are monitoring the premiums. We're looking at it from an intelligent point of view, looking at the premiums. So there is nothing to be announced for January now. We're going to be monitoring that throughout the month and then decide what will make early next year. As for the steel industry question, as I mentioned, we are now finalizing a cycle of maintenance and repair at the converters and the gas collection systems, that cycle will be completed in February, a couple of months. With that, we'll have operational stability at the steel industry. And other investments are already ongoing. Centering is more focused on the environmental front, which will not impact production levels. So the main challenge for us from the point of view of volumes of production, is that the industry at the steel industry front and those maintenance works will be completed by early next year. To the question about our trust on the CapEx level, will do what makes sense to our shareholders. We will check price sensitivity for next year. Our project group will be delivering an EBITDA of about BRL 11.8 million with the CapEx of BRL 15.3 billion. So we're talking about highly profitable projects, and that's the level of trust that we have in the project. So every day, they become more mature and confirm our expectations. And the reason for the delays to your question, have to do with this commitment, this discipline as we allocate capital from our shareholders. To give you a concrete example, for [indiscernible] we went to market with a single infrastructure package saying if I generate synergy, we have scale gains, we will decrease interface with third-party contractors. And then we received space, which was above what we expected. It is a complex project. It's a very select group of companies that can deliver the quality that we require. And the other part of the project is simple to build entrance gates, cafeteria, it's all big. It's a cafeteria for 1,000 people. So it's hard to break that down, divide the scopes, go back to market, contract other companies and they need a month to analyze technical proposals and they have different technical proposals and we send our team to review it. So instead of forcing the proposals, whenever we come across intelligence, alternative proposals, maintain the same level quality. We're exploring each and all of those new proposals and that led to delays. That's why we have updated the assumptions and it also led to a higher compliance for the CapEx despite high inflation rates. As for the commercial front, I'll give an example. Sometimes you have a proposal on the table and they say, go back and remove another 10%. And they say, no, I can't, I can't, but oftentimes, they delivered the 10% discount. So that's why we have some delays. They have to do with the group's DNA, the group habit of looking always for the best possible deal at the very best possible quality. Cost control is something we really insist on, even though it might lead to delays.

Camila from Bradesco. A question about prices. You mentioned that you're thinking about growing volume by more than 10%. My question is in a landscape which is less optimistic than the one you are mentioning, maybe China will not export that much. Would you consider maintaining a slightly lower price to be able to get an increase in share and import. And a second question. Despite this is a small part of the business if you could talk about automotive contracts, any reduction expected for Q4 or Q1 next year?

Starting with your second question about the automotive contracts I am not the main supplier for this market. But the competition made the necessary adjustments about 7.5% or 10% for the main players. We made a small adjustment smaller than that. We did something like 3% and 4% for the two main players we work with that we have today, for the first quarter of 2024. Our price was well adjusted actually and slightly higher than the spot price. So when we talk about automakers, I also include the white line manufacturers because they also have contracts to the same tune of 3 months. So they're somewhat in line and well priced when compared to the spot market right now. Should something happen next year, they should go on like this. As to your first question, there is no possibility of working below because of the very numbers, the margins we had in the last quarter are very low margins. There is no where to go, right? we have a recovery from operational excellence, which will contribute to a margin increase, but I do not want to use that cost buffer to deliver that cost. I cannot do that. And I cannot work with a margin which would be lower than the premium, right? So it's quite the contrary. Now as we diminish capacity. The other things that will help the market be more adjusted in terms of demand for the long steel market where we are also full. I've heard that competitors are diminishing capacity [indiscernible] will shut off one of their blast furnaces. We will work this year or next year to offset what we didn't do this year. So I think the premiums in my opinion, will be what the world is. About 5% to 10% depending on demand. That's basically the equation I'm expecting to see in the specific case of CSN. We take special care for coated products and tinplates, which became a difficult business. It didn't used to be difficult. When you look at [indiscernible], Nipon steel, companies that were not that competitive in Brazil. As there are no other place to export, they did the same thing as China did. They coped China and started exporting to Brazil. So we need to be careful about that as well. But in terms of profitability, I think next year, we'll be able to recover our margins with, again, a scenario of operational excellence and a good pricing structure. In a more hostile scenario, have in mind that I'm not considering sending BQs to Portugal. I'm going to continue the BQs in the internal market. We have a way for that, way out for that. That's a relief for Brazil and a very extreme scenario again. And I would imagine that in the U.S., I am working with our quota of zinc materials. So I have a degree of freedom that allows me to manage well that position I have there. So I'm quite reassured for that. I think the worst is over. This year was bad. I had no products to sell. We didn't have a good market and high imports. Next year is going to be much better, rest assured. Looking at the past promises I made, I usually get them right, right? so it's going to be better.

We have time for one final question. Perhaps, is there a question?

I have two questions for Pedro and they are the following: from Lucas [indiscernible] XP, congratulate you on the events and the question is the market seems to be pressured for 2024. Taking into account the higher demand from China. How do you see the marginal return from the Phase 1 expansion project in a context where you have more capacity for high grade or not only from CSN, but from other projects such as Simandou. And lastly, from Tiago and the question is, in the presentation, we increased your projection for investment for CapEx from BRL 3.8 billion to BRL 15 billion now in 2023. But for the year, what we saw was investments below what the market expected. So the question is, do you intend to recover that throughout the cycle through 2027.

Thank you, Lucas. We truly are thinking of a very tight market. There's a deficit of 25,000 tons in China incrementally in infrastructure, there should be a growth with stabilization of real estate and especially infrastructure [indiscernible]. Now in the projects that we have in the portfolio, we have a long-term price that incorporates the products you have mentioned. We have spoken of an amount greater than BRL 6 billion, always being somewhat conservative with a CapEx of BRL 15 billion. These are exceptional returns based on more conservative premises. Now the coming year, this would represent an EBITDA of BRL 11.8 billion that would be transformation for the group despite the scale that we have already reached. Regarding the question of Tiago, the low investments in 2023. I think they're connected to the delay in the project we explained why this has happened. There will be a relevant ramp up the coming year. We're referring to reaching figures of BRL 15 billion the coming year. The coming year, we should increase that amount threefold with a relevant impact in the progress of each of these expansion products. Of course, underscoring the PK15 project that represents a large part of this amount, very well. It is BRL 130 million. It has been a long session. I would truly like to thank all of you for your presence, thank the investors, the analysts, the CSN team for their devotion and preparation of this event. And for the interest, I think we had some very important messages for 2024, where our IR team once again is that your entire proposal. Thank you very much once again. [Statements in English on this transcript were spoken by an interpreter present on the live call.]