Companhia Siderúrgica Nacional S A : Annual Report of Grupo CSN 2023​

The performance of the CSN Group in 2023 highlighted the importance and success of the strategy of building, consolidating and expanding an integrated and verticalized business portfolio in essential production chains for different types of industries, with a close eye on sustainability issues and challenges. Last year's achievements and results confirm the investment thesis and the search for organic and inorganic growth in the different markets in which we operate.

CSN Mineração achieved record operational and financial results, in a favorable market context for iron ore combined with significant operational improvements. CMIN has a robust investment plan to position itself

at a new level in the transoceanic iron ore market. The startup of P15, scheduled for the beginning of 2027, and the bold strategy of de-characterization and reprocessing of dam tailings will allow the commercialization of premium products, which enable the decarbonization routes of steel mills globally.

CSN Cimentos is also on a path to growth and business expansion. With the integration of the new units acquired, the Company reached second place in the national market and expanded its participation in the technical cements and aggregates segment, with a portfolio of products and new solutions for the construction industry. A highlight

is ECOCEM50, a cement that has one of the lowest CO2 emissions intensities in the world, adding value, safety and sustainability for customers. In line with this trend, CSN is also increasing its appetite for capturing greeniums in its product portfolio.

In the steel segment, investments for the modernization of the Presidente Vargas Steelworks (UPV, acronym in Portuguese) will position the CSN Group at the forefront of a more sustainable steel production model. The strategy of vertical operation in the steel chain, with solutions in the distribution and marketing of products with higher added value, in addition to the consolidated international presence in Europe and the search for new opportunities in the United States, contributes to increasing CSN's competitiveness.

Performance in 2023 highlights the success of the corporate strategy and ratifies the quest for business growth

The year was also marked by relevant achievements in ESG risks and opportunities management, complementing corporate risk management. In 2023, mainly following the guiding vectors of the TCFD (Task Force on Climate-related Financial Disclosures) and the TNFD (Taskforce on Nature-related Financial Disclosures), the Company mapped the risks and opportunities related to climate change, its physical and regulatory consequences, and related to the dependencies and impacts of nature and biodiversity. The pace is to work aiming to meet future expectations of more active management of social risks based on frameworks that are being developed for this purpose.

Other relevant work contributed to strengthening relationships with local communities neighboring our operations. At CSN Mineração, for example, the focus is to mitigate possible social impacts during the execution of expansion plans, applying an action plan based on the Human Rights Due Diligence, started in 2022.

CSN Cimentos' operations now have a community engagement plan, which allows to understand the demands and opportunities of these territories and support local actors.

Integrated cement factory (Arcos, MG)

In logistics, mainly in the Transnordestina works, the Investment Program in Rural and Sustainable Productive Inclusion Actions (PINAPS) was launched in the state of Piauí, built based on the CSN Group's Theory of Change. With an investment of approximately R$ 15 million, the program was created with the mission of transforming the lives of at least 100,000 people in the state, through the promotion of rural agroforestry and family productive inclusion actions.

In this edition of the Integrated Report, the CSN Group shares this story that grows richer every year and makes all employees proud. The mission of "doing well, doing more, doing it forever" remains, with the certainty that the Company is more prepared and strengthened to overcome the challenges of the future.

Good reading!

CSN Board of Directors

Benjamin Steinbruch

CEO

For the entire CSN Group, the year 2023 was marked by intense work to integrate the new assets acquired in the cement and energy segments and, also, to overcome the challenges in the different sectors in which the Company operates, always guided by the purpose of doing well, doing more and doing it forever. Therefore, it is a source

of pride to be able to celebrate, together with our employees, the achievements attained with maturity, focus and determination.

CSN Mineração, the second largest exporter of iron ore in the country, had a record result in its history, with 42.6 million tons of iron ore produced and a 37% growth in its revenue in the annual comparison. With greater efficiency and quality, CMIN captured relevant price opportunities throughout the year and contributed to maintaining the CSN Group's positive financial indicators.

Cement is another segment in which we were able to celebrate large deliveries. The integration of the new units was fully completed and CSN Cimentos reached second place in the sector, a trajectory of exponential growth. We made progress in capturing synergies and increasing market share, reaching

around 13 million tons of cement sold and an adjusted EBITDA of R$ 975 million.

In the energy sector, the integration of generation assets acquired by CSN Energia was also completed successfully. The growth in participation in this segment guarantees the supply of 100% renewable electrical energy to the CSN Group's businesses and accelerates the strategy of offering essential carbon neutral inputs to society.

In the steel industry, we had to overcome major challenges during 2023. Internally, cost pressure and temporary inefficiency faced in the furnace at Usina Presidente Vargas Steelworks (UPV, acronym in Portuguese) reduced operating margins and increased slab costs. Externally, the conditions of competition between Brazilian and imported steel were completely unbalanced and affected the national industry. The situation has been reversing since the second half of last year, with a solid investment plan for the modernization of the UPV and the implementation of new management practices that will take CSN's steel production in Brazil to an even greater level of efficiency, quality and competitiveness.

It is important to highlight the strength of the CSN Group in the steel sector on the international stage, with innovations and solutions aimed at the decarbonization of products. Currently, 19% of the Company's steel production is classified as green steel, with the Green Steel seal, as it has reduced CO2 emissions in its production process.

On the logistics front, the highlight was the evolution of performance levels in the railway sector, offsetting a lower performance in the port segment in the annual comparison. In the end, we operated with an adjusted EBITDA of R$ 1.3 billion and a margin of 50.6%, a result 21% higher than the previous period, which demonstrates the efficiency gain and the improvement of the cargo strategy implemented.

Decarbonization

The decarbonization agenda is one of the main themes of the CSN Group's ESG strategy. In a structured way, we have connected innovation projects, investments in new technologies, risk management models and definition of goals so that all businesses contribute to mitigating the impacts of climate change and, at the same time, are adapted to new impacts arising from the transformation of the climate on our planet.

CSN Cimentos was a pioneer in its business portfolio to establish a science-based decarbonization target. In 2023, I signed the submission of our commitment to the Science Based Target Initiative (SBTi) platform, seeking to reduce our emissions in the sector to guarantee the limitation of global warming to up to 1.5 ºC. Another highlight was the evolution of CSN Mineração towards the electrification of off-road vehicles. Three 100% electric trucks have already been acquired by the Company after positive tests last year and four more will enter the evaluation phase in 2024.

The effectiveness of our ESG strategy has been recognized by the market

and leverages the decarbonization of business

Our efforts and results in climate management have been positively recognized by external institutions. One of the main ones is the CDP, an international platform that evaluates governance and plans for mitigation, adaptation and management of risks and opportunities associated with climate change. In 2023, we were able to celebrate achieving an A- grade in the voluntarily submitted questionnaire.

Other ESG ratings also show great evolution. The Sustainalytics assessment listed CSN and CMIN among the 11 organizations with the best scores in the sector in the global ESG Risk Rating. The Company was also recognized with the Industry Mover seal, in the steel segment, by the rating agency S&P ESG, as the one that had the greatest improvement in relation to its peers in the world. Furthermore, it was the only organization in Brazil in the mining, steel and civil construction sectors to be named in the 2023 Sustainability Yearbook of this same agency.

Innovation

Much of the progress on the climate agenda, as well as on other business fronts, is driven by CSN Inova. With a strategy and four action fronts, our innovation platform across all businesses provided more than R$ 400 million in incremental revenue with technological update solutions, new production routes, and advances in the ESG agenda and in the relationship with stakeholders.

In the steel industry, we began testing the use of technology that injects controlled amounts of green hydrogen to increase combustion stability. This solution, successfully applied in the cement operation, is an example of how CSN Inova works to generate value in a way connected to our integrated and diversified business model.

Another example is the Circula+ spinoff, which stimulates the circular economy by promoting the valorization of co-products and unusable products in other production chains. In the last year alone, with ten active customers, the platform transacted around R$ 4.5 million.

with the responsibility and ambition of promoting intentional actions, which generate genuine opportunities for the black race.

In human capital management, safety is a non-negotiable value for the CSN Group. Therefore, in 2023, we launched the AGIR Program, an initiative that encourages the active participation of leadership in the prevention

of high-potential accidents and fatalities. The continuous improvement of safety indicators is an absolute priority for the Company and a commitment of all managers.

Additionally, I highlight the work of the CSN Foundation, which, in 2023, accompanied the expansion of the CSN Group. The Garoto Cidadão project reached the Northeast region and four other territories, going from 9 to 14 units. Furthermore, we implemented the Empower

to Grow project, aimed at preparing young people to enter the job market, as well as the formulation of two projects dedicated to elderly people, marking our debut with this audience. The Foundation worked directly in 37 cities with an investment of R$ 57 million in 104 projects of its own or partner institutions.

I am very proud to lead a Company that

People

The protagonists of the evolution of the CSN Group are our employees, who have made exceptional efforts to achieve the vision we outlined for

the year. The qualification and engagement of our people are a competitive differentiator that unequivocally drives the business forward.

We continue with the strategy of expanding diversity and inclusion, having reached more than 6.5 thousand women employed at the CSN Group. Furthermore, as one of the founders of Mover (Movement for Racial Equity) we are tasked

The care we take with people is reflected in the improvement of diversity and inclusion, the strengthening

of safety and in the social responsibility investments

is so influential in the national narrative, an entity that transcends all the challenges presented to it. I remain confident in our ability to generate positive impact, in our resilience and in our competence to adapt to the different scenarios imposed.

It is with great pleasure that I invite you to explore more about the CSN Group's journey in this Integrated Report.

Benjamin Steinbruch

CEO

This tenth edition of CSN Group's Integrated Report reinforces the Company's commitment to transparent accountability to society and the constant evolution of social, environmental and governance information disclosure practices. This publication has been prepared by CSN since 2012, and, since 2020, it has been published annually and is subject to independent verification.

Approved by the Board of Directors and audited by Grant Thornton, this document presents the management practices, performance and goals defined by the Company in the period from January 1 to December 31, 20231. The topics covered throughout the chapters were defined according to the 2023 materiality study and represent the main impacts, risks and opportunities associated with the CSN Group's business model.

The 2023 Integrated Report covers the same scope as CSN Group's financial statements, except for the hydroelectric plants of which CSN is a minority shareholder and MRS Logística. These companies are considered for the consolidation of financial results but are not covered by GRI disclosures. In relation to the previous year, the scope of the Integrated

Report was expanded with the inclusion of units acquired in 2022 by CSN Cimentos and CSN Energia. Any specific scope limitations in the disclosures are indicated throughout the content.

In line with the main market benchmarks, the document was prepared in accordance with the following frameworks:

GRI Standards for Sustainability Reporting, from the Global Reporting Initiative;

International Framework for Integrated Reporting (IIRC) in accordance with Technical Guidance 09 of the Accounting Pronouncements Committee (CPC);

Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the Task Force on Nature-related Financial Disclosures (TNFD);

Sustainability Accounting Standards Board (SASB) indicators for the Iron & Steel Producers, Goalls & Mining, and Construction Materials sectors.

The financial data2 follow the guidelines issued by the CPC Committee and the international accounting standards (International Financial Reporting Standards - IFRS) issued by the International Accounting Standards Board

(IASB), as well as the interpretations of the International Financial Reporting Interpretations Committee (IFRIC).

To send comments, questions or suggestions, please contact us by email

sustentabilidade@csn.com.br.

1. The data and information presented in this Integrated Report contain statements about current and future sustainability measures, targets and other objectives. These targets have been disclosed in the limited context of the Company's sustainability efforts and should not be construed as statements of management's expectations or estimates of financial results or other guidelines. The Company cautions investors not to apply these statements in other contexts.
2. In the case of conversions with foreign currencies in relation to the Real, the average annual exchange rate for the reference period of this Integrated Report applies.

ESG Databook

Detailed information that meets the GRI, SASB, TCFD and TNFD requirements is gathered in the CSN Group's ESG Databook. This document improves transparency to meet the specific needs and demands of different stakeholders.

Click here and access

the ESG Databook

Passo Real Hydroelectric Plant reservoir (Salto do Jacuí, RS)

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GRI 2-2 | 2-3 | 2-5 | 2-14

In the footer, notes indicate which GRI disclosures and SASB indicators are answered on each page. Correlations between GRI disclosures and UNCTAD indicators, Global Compact Principles and Sustainable Development Goals (SDG) are presented in the GRI content index.

Materiality matrix

The materiality study conducted by CSN in 2023 guides the topics covered by this edition of the Integrated Report and brought two significant advances in relation to previous exercises of evaluation and prioritization of material topics.

The first of these is the incorporation of the financial materiality bias, giving the study methodology the condition of double materiality. From this perspective, the evaluations considered both the impacts generated by the Company on people, the environment and human rights, as well as the most relevant social and environmental risks and opportunities for the business segments. Double materiality is one of the premises of the European Sustainability Reporting Standards (ESRS), approved in 2023 and which will become mandatory for companies covered by the Corporate Sustainability Reporting Directive (CSRD).

The second differential of the most recent materiality study is the integration with CSN Group's permanent channels of listening and dialogue with stakeholders. This approach, known as organic materiality, makes it possible to capture the demands and interests of the various audiences in a continuous and integrated way into the day-to-day processes of operations.

In this way, it is possible to obtain a much more dynamic and in-depth view of stakeholder expectations and the impacts, risks and opportunities associated with material topics.