CSN Earnings Call Summary (Q1 2026)

1Key Financial Results and Metrics

EBITDA Growth: Increased by 5.5% year-over-year, reaching a margin of 31.2%.

Leverage Ratio: Improved to 3.36x, down from 3.47x in the previous quarter.

Free Cash Flow: Reported at negative BRL 1.6 million due to seasonality, working capital consumption, and high financial expenses.

CapEx: Decreased by 49% compared to the previous quarter, indicating a focus on cash preservation.

Net Debt: The company aims to reduce net debt significantly, with a target of BRL 2.8 billion in net debt for the cement segment by year-end.

2Strategic Updates and Business Highlights

Cement Performance: Achieved record EBITDA, driven by strong demand from the Minha Casa, Minha Vida program and effective price management.

Mining Operations: Set a record for iron ore production despite adverse weather conditions, with positive price trends expected to continue.

Steel Segment: Sales increased by 12% quarter-over-quarter, supported by a favorable commercial environment and improved export performance.

Logistics and Energy: Logistics EBITDA grew by 26% year-over-year despite seasonal challenges, while energy EBITDA rose by over 92% compared to the previous quarter.

Divestiture Process: Received over 7 proposals for asset sales, indicating strong interest and potential for favorable outcomes.

3Forward Guidance and Outlook

Cement Sector: Potential EBITDA could exceed BRL 2 billion for the year, depending on market conditions and pricing strategies.

Steel Prices: Anticipated price increases of 5-8% in the second quarter, with expectations of improved margins.

Operational Improvements: Continued focus on reducing operational expenses and managing working capital effectively to enhance cash flow.

4Bad News, Challenges, or Points of Concern

Negative Free Cash Flow: The company reported a negative free cash flow for the quarter, raising concerns about liquidity.

Seasonal Impacts: Heavy rainfall affected logistics and production, leading to challenges in operational efficiency.

Exchange Rate Pressures: The appreciation of the Real negatively impacted revenue conversion.

Competitive Pressures: Intense competition from imported materials, particularly in the steel segment, poses ongoing risks.

5Notable Q&A Insights

Capacity Utilization: Steel segment capacity utilization is currently above 70%, with expectations for increased production and reduced inventory in the coming quarters.

Antidumping Measures: Discussions are ongoing regarding the renewal of antidumping tariffs, which could significantly impact the competitive landscape.

Bridge Loan Details: The bridge loan of BRL 1.2 billion may expand to BRL 1.4 billion, aimed at supporting short-term operations and debt reduction.

Divestiture Strategy: The company is focused on selling control of the cement segment, with binding offers expected soon, indicating a strategic move to enhance financial stability. This summary encapsulates CSN's performance and strategic direction for Q1 2026, highlighting both achievements and challenges faced by the company.