Good afternoon, ladies and gentlemen. Thank you for holding. At this time, we would like to welcome you to CSN's Conference Call to present Results for the Third Quarter '20. Today, we have with us the Company's executive officers. We would like to inform you that this event is being recorded and participants will be in a listen-only mode during the Company presentation. And following this, we will go onto the Q&A section when further instructions will be given. We have simultaneous webcast that may be accessed through CSN's Investor Relations website where the presentation is also available. The replay of this event will be available for the period of one week. Once again, you can slip through the slide at your own convenience. Before proceeding, we would like to state that some forward-looking statements made herein are near expectations or trends based on the current assumptions and opinions of the Company management. Future results, performance and events may differ materially from those expressed within as they do not constitute protections. In fact, actual results, performance of the event may differ materially from those expressed or implied by forward-looking statements due to several factors; general and economic conditions in Brazil and other countries, interest rates and exchange rate levels or prepayment of debt denominated in foreign currencies. Protection is measures in the U.S., Brazil and other countries, changes in laws and regulations and general competitive factors at global, regional or national basis. We would now like to turn the conference over to Mr. Marcelo Cunha Ribeiro, Investor Relations Executive Officer, who will present the Company's operating and financial highlights for the period. You may proceed, Mr. Ribeiro.

A good day to all of you, once again thank you for participating in our conference call for CSN. We're going to, first of all, go through the presentation, and upon the close of the presentation, we will hear from the Chairman and then go on to the Q&A session. We begin the presentation on Page 2 to speak about our results, and it is important to celebrate we were able to go through a quarter that is still being impacted by the pandemic but with very little impact on our operations as you can see from the results and from the viewpoint of the health of our employees. We have a favorable situation. We have had only six active cases at the plant at Volta Redonda. And of course, this points to the assertiveness of our precautionary measures that are still valid. And we intend, of course, to continue to obtain these excellent results. On Page number 2, to speak about the highlights. We begin with our excellent results, we prepared for the worst, but we had something better. We had an accelerated growth in all of the markets, but we faced the market much better with boldness in terms of cost and expense working in all of the item lines of our balance, and we were able to achieve the best adjusted EBITDA of BRL3.5 billion in our history. This gave way to a strong cash generation, a lengthening of liabilities, new prepayment, reinforcing liquidity and an improved debt profile. And what is very important, once again, although our indebtedness is high, this quarter, we have reduced our debt to BRL2.5 billion with the best reduction in leverage in the last five years with a drop of 1.5 and we will refer to this during the presentation. On Page number 4, we show you the EBITDA evolution during the quarter, an improvement of 82%, and compared to the previous year, 264%, taking us to a historical profitability with a margin of 39% achieved, and 70% of margin in mining, showing the strength of the business at CSN. We had a growth at all units in steel 70%, in mining, 90% in cement, impressive 264%, and we have good news in all of our business lines, a moment of record revenues because of cost of prices and a good operational performance. And if you look at SG&A, you will see that we continue to cut down on this. On Page number 5, we have our cash generation. First of all, we begin with CapEx, very aligned with the BRL1.5 billion for the year. And this quarter continues to follow that direction and the net working capital was significant and helped us in cash generation. We had a significant reduction in inventory, especially in the steel business, where we had a high-volume because of the situation in the second quarter, we were able to reduce finished goods and inventory being produced, and it came down to the lowest level of inventory and slabs. And in terms of net working capital, we generated almost BRL1 million with a very good receivable turns in line with our history. Our suppliers, once again, working according to the proposals made before the pandemic we have the double of the adjusted cash flow. And as you can see on the next page, this was intention to reduce our indebtedness. We obtained what had not been possible in previous quarters. And despite a relative improvement of our indebtedness because of our net debt-to-EBITDA ratio, we did have an absolute debt that was growing. Now this quarter, we were able to revert this trend reducing the indebtedness by BRL2.5 million and leading our leverage to BRL3.5 million, if we consider the average dollar rate, but there is still a great deal to do, this area needs to be strengthened. And we continue with our goals of our net debt EBITDA of 3x for the end of this year and a more aggressive goal for 2021 to reduce this to 2.5x net debt EBITDA ratio. And what is more important is to cut our debt by another BRL7 billion. This will be possible through financial initiatives that will complement the reduction of leverage. We consider it wasn't only cash generation that allowed us to accumulate this liquidity of BRL6 billion. We also had other important efforts. We continue to lengthen our indebtedness with Brazil Bank, Tasha. And now with PI, but creditors we had a payment extension of about BRL600 million, prepayment about BRL150 million. And we now work with rates that are higher than our short-term debt that represents BRL4.5 billion. And of course, we're going to continue to address our short-term debt. Our priority in the coming months will be to prolong with bank extension up to 2023. We continue and we will now speak about the results of each business beginning with steel. From the viewpoint of volume, the volumes grew very strongly, 27% year compared to the second quarter. We're back and we do apologize for this. We began to speak about steel. We had a growth of volumes of 27% in the quarter. And as part of this growth, most of this was sold to the domestic market, 50% higher, and this shows how the strategic time of CSN has worked well. We're working with clients and industries in that sector and with a mix of products that allow us to work with added value. This allowed us to grow more than the market. We also had a strong foreign market with a few problems of seasonality and with a significant increase vis-à-vis last year. So in the year 2020, we have accrued volume equivalent of those of 2019, something that was unthinkable a few months ago when we thought we would have a drop of 20%. We now observe stability and growth for the year 2020. In revenues, a growth of 33% also aided and abetted by a price readjustment and the exchange rate, of course. And with this, the EBITDA grew 70%, an EBITDA margin of 12% already good evolution vis-à-vis the previous quarter. In the following slide, you can observe perhaps what is the most relevant element in this performance, which is our operational performance even by disconnecting glass furnace 2, we had significant activity from blast furnace 3. Last year, we went through our worst moment, productivity of 6,000 tons. We now produce 50% more, 9,500 tons, which guarantees improvement in fixed costs, and we have come to a very efficient cost structure, something we did not have for years. And this, of course, gives us a unit profitability that is different from what we observed and quite sustainable EBITDA per ton of more than 431. Now to speak about mining performance, we were able to attain the volumes of last year. And this was the recovery that we expected despite the rainfalls and delays but in the third quarter, we have volumes equivalent to the third quarter of the year 2019, 2 million sales, very good production. And of course, taking advantage of this excellent moment of sales, dollar rise sales and a much more competitive cost, as you can observe, fixed costs and we depend less on the iron ore accounts of third parties, and this has increased our EBITDA margin by 60% and 90% in terms of nominal EBITDA. Lastly, not less importantly, we speak about the cement performance that has gained relevance that it would not have in the past, thanks to the market. We show you the inflection point of the market that is impactful because of the pandemic and the growth that we were able to obtain up to September. The market could get to a growth of 9%. And if we annualize the growth we see in the third quarter, we go back to the peaks that we had in 2014. But of course, supply has limitations, and this has taken us to a balance supply-demand situation that is favorable for us. Our volume grew by 16%, we had a growth of 51% in net revenue and EBITDA increased fourfold to BRL100 million and an EBITDA margin of 39%, once again, highly sustainable figures in this third quarter. With this, we would like to end the presentation, and I give the floor to Benjamin Steinbruch, our CEO and Board Chairman, to begin the Q&A session.

A good day to all of you, and thank you for participating in the call. I would like to highlight a few elements that have already been mentioned previously, but we would like to underscore once again, the team has obtained this favorable result and a favorable outlook going forward. We have the reduction of costs. We began the year with a very strong program to reduce expenses encompassing all of our businesses and all the possibilities that existed to in practice, cut down our cost and become ever more competitive or year that seems to be very challenging. We prepared the Company as a whole for a varying that poor market improves. We prepared CSN for a war. And what we wanted to do was to obtain the greatest competitiveness and resistance and resilience to go through a year that we imagine would be very difficult. Our forecast and that of everybody, of course, beginning in the second quarter, things began to improve. And especially beginning in the third quarter things did not comply with our expectations of a market that we had deemed to be lacking began to depend on the projection of all of our products. Now this work, as I mentioned, was carried out in all of the business segments of the Company, all of the areas of the Company. We're still lagging behind in terms of the steel and cement results. In the steel business, we're making investments in the coke and centric area. And with the return of blast furnace two, we once again will begin working full steam in the second fortnight of November. And we will be able to have a greater decrease in fixed costs. And since men have some timely problems in production, leading to a cost increase, but we do believe that this will return to normalcy because of cost and production. In mining, we were able to continue on with the work we were doing, gaining in production and presently we're working very close to what we can truly produce. Therefore, the most important results obtained was thanks to the preparation of the Company to face a very difficult year as you know at present the Company as all large companies are working through their production. To ensure that we are able to replace our stocks and were already for this in-house as well as externally simply to give you an idea, we have used all of the intermediary inventories of the Company. This includes our emergency stock that we hold for eventual problems in production. All of this inventory has been consumed. Our inventory level is very low. We're producing at full steam and we believe that as of the fourth quarter that issue supply and demand will balance out. We are convinced that with a full steam production in all segments and as we have the needs for regulatory stocks in the supply chain, this lack of products will be adjusted in the first quarter and the market should return to normalcy beginning in the second quarter of 2021. Now this favorable condition for the domestic market vis-à-vis the foreign market and with a reduction of cost and an increase in price because of the positive market is a very good result and this is what we are presenting to you. We think that this year is a given. We have all of our products in all of our lines, and we're running after a good production. And I think that next year, we will have a better balance beginning in the second quarter. And from the viewpoint of the measures that have been put in place, we will ever more harvest the good results of this preparatory work. When it comes to our capital structure, we're also working for quite some time, decreasing leverage and deploying enormous effort to improve our results. And we now have a leverage that allows us to consider the Company at a satisfactory level when it comes to the net debt EBITDA ratio. We have gone back to selling assets, streaming operations, prepayment operations. The lengthening of the debt that was done in the domestic market with those banks will continue. And the insurance of bonds deposit a good market moment. This will allow us a good window and will enable us to lengthen our capital structure. This is what we're seeking. Basically, these are my comments. The third quarter was very important for the shareholders that regardless of the market and the market improvements, we're working in the right path. CSN begins to show its potential when it comes to working in a favorable market and we're making the very best of this so that as part of that priority that we all have and that we set forth at the beginning of the year will allow us to attain the reduction of leverage and an improvement in our net debt EBITDA levels, allowing us to go back to being a very balanced company and to make the most of the opportunities in the market. These are my comments, and I am at your entire disposal for your questions.

Our first question comes from Thiago Augusto from Goldman Sachs. You may proceed.

My first question refers to the situation of domestic shipments in Brazil for the steel company. It seems that the market is extremely active. Some clients are referring to a lack of product, if you could speak about this issue of supply. And if there is the potential for a new price increase in the coming weeks, which is the parity level that you would consider and if you're concerned with the exchange rate, if this new increase would be at risk or not because of this?

Now the first question that you made about supply and demand. In terms of supply, simply to give you an idea Ninas and Arcelor are working with all of their blast furnaces, we will resume in the second fortnight of November. In April, we sold 500,000 tons per month, went to 600, 800, and August and September, 900 to 1 million tons. I think this shows the advance we have in the domestic market in terms of supply. When it comes to demand, if we put together all the capacity of and include CSN, the capacity is 1.2 million tons. There is no possibility at all, but there will not be any steel in the market. We're working with all of our lines. Another very important aspect that has helped us in our day-to-day in the domestic market are the imports. We have a drop of imports of 60% to 70%, 80,000 tons per month, and I have to be careful because I'm a leader. And both 80,000, 50,000 have been put in place. So that idea of having a lot of supply has to be totally discarded. An important data that sustains the Brazilian market in the China side, that in China, they're working with 90% degree of use. And China itself is importing from Brazil and Russia. So this is a very important equation. As it comes to the parity that all the count that we always work with, the Chinese BQ will drop, it will be around $500. I could put $510 or $520, but the prime is negative in 5% to 6%. So this does allow us to go on to a new price increase, and we have already announced this for November, 10% in November and 7% of the galvanized product. You spoke about the market situation and what will happen going forward. Simply to give you an idea and Marcelo already referred to this, our domestic sales accrued at the present grew 6% vis-à-vis to '19, the market had a drop of minus 9%. It shows you that our momentum is to win in the domestic market. In the long steel market, the market grew 1%, CSN grew 8%. Now to speak about the value change, we imagine that short steel for the year, we'll have a drop of 5% in the market and long steel will grow 1% to 2%. In terms of the market, we can speak about distribution. What out of doubt it will grow a minimum of 3%, perhaps 5% because all of the distributors are selling to the production change the inventory is lower than two months, and there has been a recovery of this market. In civil construction, and this has a direct impact on CSN, everything is positive. We have new residential construction. And the good news is that there is the resumption of investments in infrastructure, the realistic market, especially in packaging, which is a very important business for CSN, where we have a huge margin of 1,300 per ton. We grew 30% quarter-on-quarter. Why? There's a clear movement to replace plastic by steel. This is well known, and it happens, especially in the food segment. The food segment working for steam, and we're also accompanying the growth of civil construction in the promotive market, a drop of 30%, which is positive as it was opposed to the 45% production, 2 million units. Inventories are low and they're resuming production the white line because of the habits of consumers who want to have more comfort at home is also progressing post and the outlook is very good for the end of the year because of positivity. And finally, the truck market, agricultural machines and other machines. They're growing as there is a greater capacity for trucks, and the idea is to grow from 5% to 10%. So this is a scenario that we have for this quarter, this semester, and for the first quarter of 2021, we think this scenario will also prevail.

If you could refer to the increase you spoke about a product increase of 10% for flat and long steel. You have mentioned 13% and have you begun a negotiation with the automotive market for price increases?

In terms of prices, to clarify, we experienced a 40% increase in distribution until August across large networks and minor industry segments. In October, we raised it from 11.75% to 13.5% for distribution and some industrial changes. In November, it was 7.5% and 10%, totaling a 40% increase, and we anticipate a price carryover of 12% to 13% in the fourth quarter, which will be the average price increase for CSN. Regarding the automotive sector, we have started negotiations. Since this is not our primary sector, we hold a smaller market share compared to our competitors. However, we expect at least a 30% to 35% increase in production costs. To produce 1 ton of steel, we require 1.6% of iron ore and 4.6% of coal. Considering the dollar rate in January this year and the current rates for iron ore and coal, our calculations indicate a cost increase of about 55%. Thus, the focus is less on supply and demand and more on reducing costs for the automotive market.

The next question comes from Thiago from Bradesco BBI. You may proceed.

Martinez, could you elaborate on your vision for 2021? Considering the unexpected strong demand, what is the primary risk you anticipate for this year? Are there concerns regarding demand, or do you remain optimistic in the short term? Additionally, do you think this enthusiasm can persist throughout 2021? Also, could you share your thoughts on the cement market? I believe that construction is quite robust in the retail segment, where you have direct exposure. I would like to understand your views on how this could impact the first and second quarters of 2021 and if it might help stabilize the situation.

We are very optimistic about the market, largely due to our strong order list that extends until February. The demand from clients remains positive. Although there was a slight dip in December and January, we believe we need at least one more month to assess our inventory levels, which we've previously discussed. It’s important not to replace our intermediate and finished inventory in our entire value chain. In a worst-case scenario for the first quarter, we may not see a favorable market, but we will have good supply. Regarding imports, we prefer not to see a rapid return to Brazil as we've experienced in the past; we are being more selective with imports, especially where there's higher risk involved. For the coming year, we expect growth to be around 10%, with the market closing at approximately 12 million tons and around 13 million tons projected for next year in a stable market. The long steel market is fully booked, and we are selective about our sales, which is yielding added value as we are selling more than usual. This gives us motivation for the upcoming year. The automotive sector has yet to show growth, although there's potential for the truck segment which will require significant scaling. Currently, market capacity is 100 million tons theoretically, but only 75 million tons are available. If we look back at the third quarter of 2020, we reached BRL70 million. In the cement sector, we're managing supply and demand effectively. We have competitive costs, our pricing has been stable, and we achieved a record EBITDA of BRL100 million in the third quarter. The trend for cement remains very positive, and construction activity, both commercial and residential, is expected to continue smoothly into the first quarter.

No. I don't think you forgot anything. Simply another question, if you allow us a confirmation you have already announced an increase in long steel for November?

Yes, absolutely. Long has to accompany the construction sector as well. And it is not possible to import long steel. The parity is very close to zero and we need to explore the ability to have more fragmented product to work along with cement in this segment as a whole.

The next question comes from Daniel Sasson from Itau BBA.

Congratulations for your results. My first question is Martinez. If you could help us to reconcile the increases that you announced during the first quarter with that average price increase that we had in the domestic market of 3%, and the coded products and what happened with the automotive sector? We would like to gain a better understanding why these prices did not increase more in this quarter, Martinez? And you said that you would have a carryover of 12% to 13% in the third quarter. My second question, I don't know if Edvaldo is there about cement. We also saw a significant increase in prices for cement, and we follow up on cement, and it seems to us that the price in the Brazilian market is quite below that of the international price that we in dollars in other markets in Latin America, $110 or $120 per ton. If you could comment there for which is the impact of this combined effect with the figures improving, perhaps fatal construction will have higher prices. And you have a more normalized EBITDA. So what is your view of this scenario in terms of the results of this operation?

Okay, Daniel. It's important to note that net revenues from CSN grew by 33%, driven by both price and volume, which also played a crucial role in doubling our EBITDA. In the third quarter, we saw a 165% increase in the market without any price hikes from the industry, resulting in less than what we experienced in the second quarter. We faced a decline in our product mix, although the market remained stable, which explains the differences between the two quarters. Looking ahead to the fourth quarter, we expect price increases to be around 12% to 13%. The industry's price adjustments will positively affect civil construction and distribution. Up until September, our prices for hot drawn steel had increased by 40%. Additional price adjustments were made in October, with a 3% hike for hot rolled steel and an 11.5% increase, along with new announcements for November that will implement a 7% rise for galvanized products and a 10% increase for hot rolled products. We are working to align our distribution prices and plan to adjust further prices for assembly lines in January. Regarding cement, while our costs have decreased, we've managed to recover prices. We're not the leading player in the Southeast, holding a 15% to 20% market share in São Paulo and Minas, and a 6% share elsewhere in Brazil. Our goal is to optimize services for the 20,000 clients in our portfolio. In terms of pricing, currently, in Colombia, Ecuador, and the Dominican Republic, prices are around $110, in Europe $95, Canada $96, while in Brazil, we are at BRL260 to BRL270 per ton. At the current exchange rate, our prices are below international levels. Cement, being a fundamental raw material, requires us to balance supply and demand with customers' purchasing capabilities. That essentially summarizes the situation.

So as confirmation nowadays even with a richer mix and with higher added-value products that you sell to the automotive market, the average price to that automotive market is lower than the one you are practicing with distribution?

Yes. That's it. Now what exists is a contract with assembly lines to last for a year. And luckily enough, we don't have that many contracts. The price has remained fixed. And this is not only with the automotive market. This also exists in the white line where the prices have to respect a certain periodicity, whether it is quarterly or every six months. So imagine the avalanche we will have in the fourth quarter and beginning of 2021. We're going to consolidate the prices given to civil construction and distribution and a simultaneous recovery of all of the industrial chain. And I'm going to give you a model for you to calculate this easier.

The next question comes from Caio Ribeiro from Credit Suisse.

And my question is to Martinez. You have had four increases this year beginning in July. And once again, the automotive chain is working with prices well below those of others. Now how can you generate a stronger restocking movement among assembly plants? And it seems that the stock is lower than usual, as you mentioned. Now perhaps if you work with the hedge in the iron ore prices and finally, in terms of cement, wouldn't this be a good time once again to practice some price increases?

We truly cannot work with a net inventory for assembly plants. We're servicing the entire sector and trying to supply them justly. We try to supply all of the production chains. We have put all of our eggs in the same basket. We supply distribution, white line and all of the sectors. Now another important point for CSN, in the third quarter, we sent 150,000 tons of galvanized material to the USA. We're going to continue with that strategy of complying with the code in the U.S. market of 300,000 tons. There is no opportunity of creating a stock for CSN at present. And the best in is to service all of the other production change. And with the hedging, we work with tonnage that only represents 5% of our company. This is not the rate for the Company. But it's important when it comes to protecting our cash flow and guaranteeing a strong cash flow. But we're not going to work on this. In a relevant way, this was done in September, October and November. In the past, we were no longer doing this. When it comes to the offer of shares, we're in a quiet period, and I truly cannot comment on this, unfortunately.

Our next question is coming from Mr. Carlos de Alba. Mr. Carlos, you may proceed.

A lot of the questions have been answered, but maybe what can you talk about the aspects of your forecast for cost particularly on steel and maybe cement in the coming quarters. Clearly, pricing has been something like going on or has been going on well for you. And volumes in that you continue to be quite constructive, at least something in the first quarter of next year, but what about cost and what the implications are for margin expansions? Thank you.

As mentioned by Benjamin, we have strongly focused on all of our business units and are now seeing the results. These results are not just timely; we will have positive news to share in the upcoming quarters. In steel, this includes the renovation of the blast furnace and other activities. We will continue to experience increased cost levels. Due to blast furnace two, we have a marginal cost that is somewhat higher, but we have diluted our fixed costs and remain very efficient in mining. In the first semester, we faced an atypical situation with low volume, but we have now increased volumes and are benefiting from the exchange rate. The cost will be around $14 or $15, which is quite efficient. In terms of cement, Edvaldo is in charge of that unit.

Carlos, this is Edvaldo. Basically in cement, what is happening is the following. We have significant exchange rate pressure about 40% of our costs are foresee that is imported from the USA, but we have been able to mitigate these effects and the cost of in the cost of fuel through changes and enhancements we're making in the process and with a relatively low CapEx and simple projects, that are enabling us to have a better fuel mix that is more efficient and has a lower cost to the operation. So we think we will continue to operate with a stable cement cost that we have maintained so far. Are there any further questions Carlos or...

Yes, the follow-up question is on working capital or cash flow generation in the fourth quarter, maybe for Marcelo. How do you see without playing out Marcelo as you close the year in terms of working capital and the impact on cash generation?

Marcelo, are you there? Once again, I'm back in the call. I have been able to connect again. Ladies and gentlemen, due to technical reasons, we had a very short pause in our conference call. We now have a question from JP Morgan. You may proceed sir.

I think we have thoroughly discussed the quarter. I would like to ask a question to Benjamin, the Chairman. In the introduction, you spoke about your focus, which is to continue to generate cash for the Company and to prepare the Company to participate in new opportunities for the future. Let's speak about this future and which are the opportunities that you would like to have. And what do you imagine for CSN in the future?

We have been discussing this topic for quite some time. We anticipate potential organic growth in both sectors we are currently involved in. Our focus is on not just increasing quantity, but also enhancing the quality and diversity of the valuable assets we have built over time. We have encountered significant growth challenges, starting with mining, and we have made a substantial impact by introducing new guidance for mining. We aim for aggressive growth, increasing our capacity by 3.5 times using our own resources, reflecting in-house growth. In cement, we have acquired two plants, one in Europe and another locally, and are seizing the opportunity for consolidation, especially given the tough conditions faced by the cement industry and the global context. We believe there will be a noteworthy shift towards consolidation since much of the existing capacity is not economically viable. This presents an opportunity for organic growth with our assets and possibly for mergers. In the steel sector, we are focused on enhancing quality and diversifying our product marketing, clientele, and productivity investments. We still have significant untapped potential. This sums up our efforts towards the Company's growth in the years ahead. We plan to integrate our leverage program with our operations in mining, where self-sustainable investments become viable. We have access to attractive funding options, particularly from the Asian market, and we plan to invest in both mining and cement to leverage our self-generation capacity while maintaining the Company's deleveraging. One new area we are beginning to explore involves natural gas, which is a crucial raw material for us as we are significant consumers. We believe that an increase in gas supply will alter the Brazilian energy landscape, allowing us to utilize this resource for various applications. We are contemplating changes in legislation and exploring investment opportunities in this sector. This encapsulates our plans moving forward.

Thank you. As we have no further questions, we would like to return the floor to Marcelo Ribeiro for the closing remarks.

Very well, we would like to celebrate of course the excellent results during these very difficult and unexpected moments, and we continue to have very positive expectations for the upcoming quarters. I would like to end by thanking all of you for your participation. See you again soon. Thank you.

The results conference call for CSN ends here. Thank you for participating and have a good afternoon.