Votorantim Participações S.A. releases its nine months of 2011 (9M11) results. Operational and financial information, except where otherwise stated, is presented on a consolidated basis for the industrial segment, in Brazilian Reais, in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and the accounting practices adopted in Brazil, which are fully aligned with the international standards issued by the Accounting Pronouncement Committee (CPC). All comparisons take into consideration the same period of 2010, except where otherwise stated.

1. Business Performance
Votorantim presented consistent results, supported by a diversified portfolio which includes business focused in the Brazilian housing and infrastructure markets. Sales volume increased in cement, pulp, steel and zinc, while it remained stable in nickel. Aluminum sales volume decreased by 6%, yet as a result of technical maintenance. Consolidated net revenues and EBITDA amounted to R$18,125 million and R$3,999 million, an increase of 6% and a decrease of 6%, respectively. EBITDA margin declined from 24.8% to 22.1%. Cement business accounted for 45% of industrial EBITDA, metals 37%, steel 7% and pulp 12%.

• Cement: Sales volume remained stable in North America and increased 3% in Brazil, which accounted for 87% of the total sales volume. Net revenues went up 4% and totaled R$6,543 million, supported by price increase and better volumes in Brazil. EBITDA decreased 10%, from R$2,119 million to R$1,918 million, due to higher petcoke (+28%) and electricity (+22%) costs along with freight expenses in Brazil. The Company is investing in 10 new plants to increase production capacity by more than 10 million tons per year until 2013. In 2011, 4 plants already started up representing more than 3 million tons per year in new capacity.
• Metals: Zinc sales volume increased 21%, due to higher volumes from Cajamarquilla facility. Nickel sales volume remained stable and aluminum sales volume decreased 6%. Despite lower EBITDA margin from CBA, net revenues and EBITDA increased 22% and 65%, respectively, as a result of higher average LME prices in the period and Milpo’s full consolidation.
• Steel: Sales volume went up 11%, supported by consistent demand in Brazil. Net revenues increased 3%, from R$2,753 million to R$2,843 million. EBITDA totaled R$281 million, a 58% decrease from R$670 million, mainly due to lower sales prices and higher scrap cost.
• Pulp: Sales volume increased by 2% mainly due to higher exports to North America. Net revenues decreased by 6% in the period, mainly as a result of the appreciation of the Brazilian Real and relatively stable average pulp price in the international market. EBITDA totaled R$1,590 million, a 24% decrease from R$2,084 million, due to lower net revenues coupled with higher freight and energy cost. Fibria concluded the sale of the Piracicaba paper mill for US$313 million, aiming to focus on the core business and for further leverage improvement.

2. Indebtedness & Liquidity
The Company has a strong liquidity position and along with the liability management undertaken during the year, it has solved the funding requirements. Debt has a long term profile with smooth amortization schedule. Average debt maturity was extended to 7.4 years compared to 5.5 years in December 2010.

Total debt amounted to R$23.4 billion, an increase of 4% compared to R$22.5 billion recorded in December 2010. Cash balance was R$5.9 billion, with additional liquidity arising from the revolving credit facility of R$3.1 billion.

Capex disbursements in the period totaled R$2.8 billion, with expansion projects accounting for 54%. For 2012, shareholders have approved the increase in cement capacity to be the unique expansion project for the year, on the back of still strong Brazilian fundamentals.

Contractual Net Debt to EBITDA ratio was 3.0x at the end of the period. Despite financial discipline, leverage went up due to the Real depreciation. The Company maintains its commitment to bring leverage down to its target of 2.0x.

Contractual Net Debt to EBITDA ratio is calculated as follows:

R$ billion
Total Debt                                             23,301
Cash and Financial Investments    (5,878)
Derivative Financial Instruments     73
Net Debt from minority stake            820
Contractual Net Debt                        18,316

LTM EBITDA                                         5,560
LTM EBITDA from minority stake     538
Contractual LTM EBITDA                  6,098

Contractual Net Debt to EBITDA     3.0x

3. Subsequent Event
On November 27, 2011, the Company entered into a Share Purchase Agreement under which it sold the total amount of the voting shares, in connection with the Shareholders’ Agreement of USIMINAS S/A, to Ternium Group companies - Confab Industrial S.A., Siderar S.A.I.C., Prosid Investments S.C.A., Ternium Investments S.àr.I. and Ternium S.A., at a price of R$ 36.00 (thirty six Reais) per share. The closing of this transaction is subject to customary corporate procedures, along with the fulfillment of certain conditions established on the Shareholders’ Agreement of USIMINAS. Proceeds will amount R$2.4 billion.

4. Global Call

Date: November 30, 2011 11:30am (Brasília) | 8:30am (NY) | 1:30pm (London)
Connection numbers:
Participants calling from USA: +1-877-317-6776
Participants calling from Brazil: + 1-412-317-6776
Code: Votorantim

September 2011 Financial Statements are available at www.votorantim.com/IR.