Earnings Call 2Q13

August 9th, 2013

On

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New Strategic Vision

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

leveraging and developing our minerals base

Expand industrial minerals base

Ensure leadership in our core markets

Maintain a global low cost production base

Grow selectively andaggressively

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

businesses as well as new businesses where

we can have a sustainable competitive

advantage

Strive to keep offering high quality and

innovative products, unrivaled services and

cost performance

Optimize production globally to improve

efficiency and support growth

Develop global supply chain management

Pursue long term growth opportunities in selected

markets where we can deliver superior value to

our customers and shareholders

▪Meritocracy▪Ethics

▪Profit▪Management and Method

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

▪Customer▪People

Our values

2

South America

3

Source: ¹WSA

+6,3%

-1,3%

2Q13

11,7

1Q13

11,0

2Q12

11,9

1Q13

226

2Q12

249

+4,2%

-5,6%

2Q13

235

Refractory Solutions Sales - Steel

Crude Steel Production¹ (million tons) - Main markets

Volume (000’ tons)

-4.8%

1H13

22,7

1H12

23,8

USA

21,2

2Q12

22,7

+3,6%

-3,0%

2Q13

22,0

1Q13

-5,8%

1H13

43,2

1H12

45,9

EU-27

+3,5%

-4,4%

2Q13

42,9

1Q13

41,4

2Q12

44,9

-5.3%

1H13

84,4

1H12

88,9

Magnesita sales to the steel industry

484

-4,6%

1H13

461

1H12

+8.1%

+1.1%

2Q13

489

1Q13

452

2Q12

478

Revenues (BRL mln)

927

1H13

940

1H12

+1,4%

4

2Q12

42

2Q13

+6,8%

34 37

1Q13

-13,7%

Magnesita sales to industrial segment

Refractory Solutions Sales – Industrial segment

Volume (000’ tons)

1H13

79

1H12

75

+5,4%

2Q13

+1,1%

9089

2Q12

-16,9%

109

1Q13

Revenues (BRL mln)

190

1H12

+4,7%

1H13

199

90,7%

+1,3%

-4,1%

2Q13

272

1Q13

268

2Q12

283

2Q13

197

34,0%

1Q13

192

34,3%

2Q12

184

32,4%

Refractory Solutions Sales - Consolidated

5

Volumes (000’ tons)

558 540

1H12 1H13

-3,3%

2Q13

+3.3%

+2,1%

579

1Q13

560

2Q12

567

1.139

1H13

+2,0%

1.117

1H12

Revenues (BRL mln)

Gross profit and margin (BRL mln)

353

31,6%

1H131H12

34,2%

389

6

34

+17,9%

+0,1%

2Q13

34

1Q13

29

2Q12

+4,8%

-18,6%

2Q13

30

1Q13

29

2Q12

37

2Q13

14

41,6%

1Q13

11

39,0%

2Q12

15

43,7%

2Q13

5

18,0%

1Q13

4

12,4%

2Q12

3

8,6%

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

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

Minerals

Services

Minerals and Services sales

59

1H13

63

1H12

+6,3%

2525

40,4%

1H12 1H13

42,7%

Services

1H12

6859

1H13

-14,0%

7,2%

1H12

15,3%

9

5

1H13

7

+4,0%

+0,8%

2Q13

643

1Q13

618

2Q12

638

Consolidated sales (R$ million)

PER REGION

+1,3%

1H13

1.261

1H12

1.244

Quarter Half year

1H12 1H13

8%

13%19%

22%39%

9%

11%18%

22%41%

Others

Brazil

South America ex-Brazil

North America

Europe

8

31,6%

202

2Q12

33,5%

207

2Q13

33,7%

217

1Q13

2Q132Q12 1Q13

105

19,2%18,8%

123

16,5%

116

1Q13

37

2Q132Q12

24

4,3%5,8%

26

3,7%

Gross profit, EBITDA and net income (BRL mln)

Gross profit

EBITDA and EBITDA ADJUSTED(excluding real estate sale)

Net income

424

33,6%

1H131H12

383

30,8%

1H13

19,0%

239

1H12

193

15,5%

4,0%

5,2%

5065

1H131H12

2Q12

16,5%

2Q13

18,8%

1Q13

105 101116

15,7%

ADJUSTED

1H13

17,2%

217

1H12

193

15,5%

ADJUSTED

9

2Q13

36

79

1Q13

2317

2Q12

62

99

CAPEXOCF

Operational cash flow, CAPEX and working capital

OCF and CAPEX

Working capital

97

173

60

118

1H131H12

36,3%35,5%33,2%34,3%

2Q13

934

1Q13

877

4Q12

811

3Q12

835

Working Capital

% of sales

10

*EBITDA excluding nonrecurring

Debt and Leverage

Total

Amortization Schedule (R$ million) Net Debt per currency

Excluding Perpetual Bond

1.2051.0591.0581.0311.002

397401373358352

3,03x

2,64x2,84x2,88x2,85x

2Q131Q134Q123Q122Q12

Net debt / Ebitda

Ebitda LTM

Net Debt

*EBITDA excluding nonrecurring

639545536520490

397401373358352

1,61x1,36x1,44x1,39x 1,45x

2Q131Q134Q123Q122Q12

Net debt / Ebitda

Ebitda LTM

Net Debt

633

77781123338

946

554

2018+

1.500

20172016201520142013Jun-13

Cash position

Amortization

Perpetual bond

Others

EUR

-4%-3%

USD73%

19%13%

104%

BRL12%

-14%

Jun-13

Dec-12

11

Octavio Pereira Lopes CEO

Eduardo Gotilla Global Finance & IR Director

Daniel Domiciano SilvaInvestor Relations

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

www.magnesita.com

Investor Relations contacts: